11 May 2011

Coalition under fire over broken pensions promise

On the first anniversary of the Coalition, Lib Dem backbenchers accuse ministers of another broken promise on women’s pensions.

Men and women will both retire at 65 by November 2018 and a phased rise to 66 will take place between 2018 and 2020

Liberal Democrat MPs and pensioners’ groups have hit out at the Government for breaking its promise not to raise the state pension age for women before 2020.

The age of retirement for women is already in the process of rising from 60 to 65 to equalise with men, and it had been due to increase to 66 for both sexes between 2024 and 2026.

But the new Pensions Bill will speed up the process, with men and women both retiring at 65 by November 2018 and a phased rise to 66 taking place between 2018 and 2020.

The changes have been announced despite a promise in the Coalition Agreement, published in May last year, which said: “We will phase out the default retirement age and hold a review to set the date at which the state pension age starts to rise to 66, although it will not be sooner than 2016 for men and 2020 for women.”

Read more: Live blog – A year of the Coalition

Lib Dem backbenchers Annette Brooke and Alan Reid hit out at the plans in a debate in Westminster Hall today.

Mrs Brooke said 500,000 women would have their pension age delayed by more than a year, 300,000 delayed by 18 months or more, and a “very badly hit group” of 33,000 women would have their state pension age delayed by exactly two years.

The poorest and unemployed could face real hardship as they struggle to manage with the state pension and benefits. Annete Brooke, Lib Dem MP

She said: “The proposal to speed up the increase of the pension age is going to deny large numbers of people the notice they need to plan effectively for a later retirement.

“I’m concerned the poorest and unemployed could face real hardship as they struggle to manage without the state pensions and benefits they were absolutely relying on.

She added: “This particular change is not in the Coalition Agreement. It’s not a large number of people, it is money that could be found by the Coalition Government.

“We need to know how much it would cost to even out matters. This is a real opportunity for the Coalition Government to actually say: ‘We really do care about giving equal treatment to the citizens of this country’.”

We are moving into a different world and gradual incremental change won’t respond sufficiently. Steve Webb, Pensions Minister

Lib Dem Pensions Minister Steve Webb told MPs: “We are moving into a totally different world and very gradual incremental change won’t respond sufficiently.

“I very much… recognise the point that ideally we would give people more notice than we have done. I fully accept that point. The difficulty is that delay, which is always the easy option, has a huge impact on the state of the nation’s finances and on our response to a world where people are living substantially longer.”

Ros Altmann, director-general of Saga, told Channel 4 News: “Men won’t have any increase before 2018 and no man will have his pension increased by more than one year. Half a million women will.

“We accept that the pension age will have to rise but it is the timing and the broken promise that we feel is unfair.

Many women are furious and desperate about how they are going to manage. Ros Altmann, Director-General, Saga Group

“No money will be saved during this Parliament, so it’s got not about cutting the deficit. We don’t need to hurry this through to have a sustainable pension system.”

She added: “Many women are furious and desperate about how they are going to manage, particularly the more vulnerable women who may already have retired, who may be ill or be caring for someone.

“They may have made careful plans for retirement, only to have the Government pull the rug from under their feet. They can’t just work for longer, because they may have retired already.”