Malcolm McLean: No easy fix for women’s state pension problems


There are two issues currently dominating the discussion about pension provision for women: increases in their state pension ages and access (or, more precisely, the lack of it) to the new single-tier state pension.

In 1995, the government of the day passed legislation to bring women’s state pension age in line with men’s. Starting in 2010 it would move up gradually in stages from 60, reaching 65 and therefore parity with men by 2020.

In 2011, however, the coalition government decided to shorten the phasing programme so that women’s state pension age would reach 65 by November 2018, and then for both men and women there would be a further rise to 66 over the next two years up to November 2020. I believe this move was due to the fact the government wanted to start increasing men’s state pension age beyond 65.

Women’s groups are now complaining a move from 60 to 66 over such a relatively short period of time is unfair and the move from 65 to 66 at least should be put back. Some are even suggesting that, as the 1995 changes were inadequately publicised, the whole programme should be scrapped or radically revised.

I am inclined to agree the move up to 66 before the end of the decade was all rather precipitous and it would have been much better for the many women affected if the original plan had been left in place. This may indeed be a source of some embarrassment to pensions minister Ros Altmann, who was largely on the other side of the argument in her former role. She now presumably has little option but to support the Treasury line in this largely financial matter.

In relation to the self-proclaimed “losers” from the introduction of the new state pension, the problem stems from the original Treasury requirement that the scheme had to be cost neutral (could not cost any more than the present arrangements).

This meant, among other things, the new pension could only be made available to new pensioners from 6 April 2016 and not existing ones, which effectively created a cliff-edge barrier between those who qualified and those who narrowly missed out.

Particularly vociferous in this area are those women born between April 1951 and April 1953. Because of the current different state pension ages between men and women they have their pensions calculated under the old system, unlike men with exactly the same dates of birth who receive their pensions under the new arrangements, albeit up to two years later.

It is difficult not to sympathise with this cohort of women in particular but what to do about it is another matter. I doubt the Government can simply give them access to the new pension in advance of the start date. Could they start them off under the old system and let them migrate to the new one from 6 April next year? I suspect not given that others would also then claim a similar protection.

I do not see either of these campaigns going away in the short term. If and when they ever get resolved is another matter.

Malcolm McLean is senior consultant at Barnett Waddingham