A legal challenge to the way the Government changed the pension age for women starts today (June 5).
Women’s State Pension Age was 60 in April 2010 and it was increased until it was equal to State Pension Age for men at 65 in November 2018; State Pension Age for both women and men is currently being increased to 66 by October 2020.
Under European law, pensions are subject to equal treatment so it might seem strange that measures for equalising State Pension Age are being challenged.
The group behind this case is claiming that there was maladministration in the way the changes were implemented and that many of the women affected have been impacted unfairly because they did not get appropriate notice of the changes.
Prospect is not a party to this legal challenge and does not have a policy on the objectives of the group behind it. However we do have policies on the impact of increasing State Pension Age and on gender equality in pensions.
Last year our national conference supported a motion that called, amongst other things, for Prospect to “campaign for measures to alleviate the impact of Pensions Act 2011 which significantly increased State Pension Age for hundreds of thousands of people with very little notice”.
There is a lot of anecdotal evidence about some people being particularly badly impacted by increases in State Pension Age and a number of packages to alleviate this have been proposed but none have been implemented. A comprehensive study showed that increasing State Pension Age has had particular impact on the health and earnings of women in “routine-manual occupations”.
As well as campaigning on the impact of Pensions Act 2011 (which increased State Pension Age for both men and women with very little notice), Prospect has also been raising the issue of the gender pension gap.
Last year Prospect published research that showed that the gender pension gap, at 39.5% in 2016-17, is over twice the level of the gender pay gap. To put this in context, this year it took until 24 May for an average woman pensioner to draw as much pension as an average male pensioner received last year.
There is a gender pension gap in both state and occupational / private pension income. This means that government legislated to equalise State Pension Age long before they provided for men and women to receive equal amounts of state pension. According to a government impact assessment, women reaching State Pension Age are not projected to receive as much state pension as men until the early 2040s.
Prospect’s report on the gender pension gap contains a number of recommendations for tackling this issue. This is much for government, but also for Prospect officials and branches, to do.
Since our report was published, there has been important and welcome further research about the gender pension gap.
Last month the People’s Pension, a leading not-for-profit pension provider, published a report showing how important it is to tackle the “motherhood penalty” in order to address the gender pension gap. The report concludes that better provision of affordable childcare is necessary to narrow the gender pension gap.
This week Which? released a report that recommended the government give first-time mothers a £2,000 pension top-up on the birth of her first child. Prospect has called for better recognition of caring responsibilities in the pension system, while we feel this would be better achieved through the state pension system, we certainly welcome the increased attention that the impact of motherhood on pension entitlement is getting.
While it is great that organisations like Prospect, the People’s Pension and Which? are raising the issue of the gender pension gap; there is a deafening silence coming from the government. We feel that the Secretary of State is actually failing in her statutory duty to promote equality of opportunity in relation to gender equality in pensions so we have written to the Equality and Human Rights Commission to ask them to investigate this inaction.
Whatever the outcome of the Judicial Review starting today, there is still a lot to do on the issue of equal pensions.