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James Gray MP: Iain Duncan Smith should find a way to lessen the blow women will face because of pension changes

Picture 2 James Gray is the Member of Parliament for North Wiltshire.

He wrote the following before the government's announcement today that plans to raise the state pension age to 66 in 2020 will be delayed by six months to address concerns about thousands of women being unfairly disadvantaged. 

Of the 60 million people alive in Britain today, about 10 million will live to be 100 years of age. Compare that with 1917, when the King had to send only 24 centenarian birthday cards, or even 1955 when the figure was 199. Today it’s around 5,000 a year, that figure predicted to rise exponentially from now onwards.

That’s great news for most of us. But who is going to pay for it all? In days of yore men retired at 65, women at 60, and then lived on their State pension for 15 or so years. What we paid in during our 40 years working life more or less paid for our 15 years of retirement. The problem is that we still work for 40 or 45 years, but hope to live in comfortable retirement for a further 30 years or so. Fewer and fewer people of working age will have to pay for more and more of us of pensionable age in the future. The sums simply don’t add up, and in the new Pensions Bill the Government are taking perfectly sensible steps to find a way of "rationing" the state pension.

The plan is that by 2020 the State Pension Age for both men and women will be 66, meaning a degree of pain for 2.3 million men who will have to wait for up to a year longer than they expected when they left school, and for 2.6 million women who will have to wait for up to two years. Now, while that may well be pretty annoying to many of us from a purely personal standpoint, most sensible people would probably nonetheless view it as fair enough from the Nation’s point of view!  It’s probably the least painful of the possible ways to fund the predicted 17% of the population living to be 100 (and the vast majority of the rest of us surviving well beyond the Biblical "three score years and ten" as well.)

So, much is broadly reasonable. But the law of unintended consequences applies as much here as with any other radical change in Government policy. There is a particular detailed hitch with how we get from where we are now to where we all want to be, namely how we deal with a cohort of women born in 1953 and 1954 who will particularly suffer from the transition.  When they left school, they thought they would retire on a full State pension at the age of 60. They probably accepted with reasonable grace the move towards 65, even eventually to 66. But the acceleration in the programme (even since the time of the Coalition Agreement which promised not to start to increase State Pension Age to 66 before 2020) will mean that a group of them – some 33,000 born in the months of February and March 1954, for example, will have to wait for two years longer than they ever had a chance to plan for.

Who can blame me for a fellow feeling with women born – like me – in 1954, who will be so harshly treated under the switch to equality of pension age. I was planning for 65, but can live with 66. They were planning for 60 and now will face an extra six years all told before they can put their feet up. But reaching 57 together was not my only reason for speaking up for the 30,000, and for the 330,000 or so who were born in 1953/4. Just sometimes in political life you spot a straight injustice which is worth speaking up about, even at the risk of upsetting one’s own Parliamentary colleagues. (Will my personal Conservative Whip please note that I am quite ready to rebel on this matter when we come to vote on it during the final stages of the Pensions Bill in the House of Commons on 18th October.)

So between now and then, I call on Secretary of State Iain Duncan Smith to find a way of lessening the blow to my fellow 1954-born women, even better for the wider group of the 1953/4 vintage. Let’s stick to the Coalition Agreement’s promise of moving to 66 from 2020 rather than 2018, or failing that, let's at least find some transitional arrangement to help this particular group of women. Our proposals do a demonstrable injustice to a fairly small group out of the 4.9 million who will be affected in total. So let’s do the decent thing, correct these unintended consequences; and without damaging our deficit reduction efforts (since the fiscal benefit from pension changes will not kick in until after 2016 anyhow), correct what seems to so many of us to be a demonstrable injustice.


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