Interactive Investor

Labour pledges to 'recompense' Waspi women and scrap pension age rises

22nd November 2019 10:23

Stephen Little from interactive investor

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A Labour government would compensate women born in the 1950s hit by the rise in state pension age

Labour has promised ‘recompense’ women born in the 1950s hit by changes to the state pension age.

In its 2019 manifesto, the Labour Party pledges to compensate women born in the 1950s for the failure of the government to adequately notify them about changes in the state pension age.

The manifesto reads: “Under the Tories, 400,000 pensioners have been pushed into poverty and a generation of women born in the 1950s have had their pension age changed without fair notification.

“This betrayal left millions of women with no time to make alternative plans – with sometimes devastating personal consequences.

“Labour recognises this injustice and will work with these women to design a system of recompense for the losses and insecurity they have suffered.”

The Pensions Act 1995 increased the state pension age for women, bringing the qualifying age in line with men by 2020.

The government then decided to accelerate its plan to increase the state pension age in 2011.

The state pension age for women was raised last November to 65 – the same as men – for the first time.

It has been steadily rising from 60 since 2011 and in 2020 the age for both sexes will rise to 66.

Campaign groups such as BackTo60 and Women Against State Pension Inequality (Waspi) argue that many women born in the 1950s were not sufficiently warned of the changes and have suffered financial hardship as a result.

Debbie de Spon, a spokesperson for Waspi, welcomed the announcement but said a clear framework on how it would be implemented needed to be developed.

She says: “As a campaign, we are calling for a bridging pension to provide an income from age 60 to the new state pension age, combined with compensation for those women affected who have already reached their new state pension age.

“We are pleased to see the Labour Party recognise the current hardship and make commitments to resolving it, however, this needs to go further.”

The Liberal Democrats have also pledged to compensate women born in the 1950s over state pension increases, while the Green Party has proposed the delivery of a Universal Basic Income.

Pledge to scrap pension age rises

As part of its manifesto, Labour has also pledged to keep the state pension at 66 and not raise it in the future.

After the current state pension age rises to 66 next year it is then due to increase to 67 by 2028 and 68 by 2039.

Labour has also promised to maintain the triple lock, guaranteeing new state pension increases by either 2.5%, average wage growth or inflation.

However, pension experts have criticised the policies for the impact they would have on taxpayers.

Tom Selby, senior analyst at AJ Bell, says freezing the state pension age is a “gargantuan promise” from Labour with “enormous ramifications for those affected, society as a whole and long-term government spending”.

He says: “It’s also important to remember that planned state pension age increases to 67 and 68 are not just based on the last few years’ data, but decades of life expectancy improvements.

"If state pension increases are to be permanently shelved, Labour needs to explain who will pay the extra cost in the long-term.”

This article was originally published in our sister magazine Moneywise, which ceased publication in August 2020.

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