Holly's Blog: The sting in the WASPI tale

29/11/2019

I haven’t written about politics or the election yet. I’m not one to toe any party line and I have no wedded allegiance to any one party. And frankly this election feels like going out to dinner, to be presented with a menu offering pheasant, jellied eels and tripe. Blueeeeugh.

Moderates seem to have exited stage left and/or right and we are left with 2 principal leaders rapidly turning into parodies of themselves, adored by a few but appearing on a spectrum between the hilarious and the contemptible for many.

This week, Jeremy Corbyn has unleashed (again) one of the more uncomfortable money debates of recent times – in my opinion – by promising to compensate the so-called WASPIs (Women Against State Pension Inequality). At an eye-watering cost of up to £58 billion.

State Pension age edging upwards to 66 next year

When I was growing up, we knew that women would retire at 60 and guys at 65. Somewhere along the way someone quite rightly pointed out that equality means equality and that the ever-increasing retirement age should be made the same for everyone.

In 1995, legislation was passed to equalise future retirement ages. But in 2011 the Government accelerated things and brought dates forward, so that this was equalised at 65 in 2018, 66 in 2020 and 67 by 2028.

Nearly 4 million women born in the 1950s have been impacted by the changes and argue – I think quite rightly – that this important message did not get through. The communication of such a key message was poor. Those born circa 1953 have a particular cause for complaint, getting less than 10 years’ notice when the goalposts moved in 2011, meaning that they will lose about 6-18 months’ State Pension.

The problem is that to compensate all these 1950s women could cost up to £58 billion. FIFTY-EIGHT BIG ONES! This would not be means-tested. Oh – and Labour is also planning to freeze the State Pension age at 66.

By 2060, 6 in 10 people will be 65 or above!

Regardless of where one sits on the political spectrum, freezing the retirement age is just bonkers thinking. OECD data published this week forecasts that 58% of us will be 65 or older by 2060. I’ll be nearly 90, hopefully surrounded by lots of cats, artificially unintelligent handsome young male helpers and gin bottles! But it was just 21% of people in 1980. From 21% to 58% of us aged over 65 - something’s got to change.

I think one of the more worrying divisions at the moment is an increasing divide between the old and the young. If I talk to anyone in their 20s and 30s about money, I am always struck by how many of them just never think that they will ever own a house. I never thought that when I was starting out. Education. A house. Healthcare. A pension. None of these are assumed parts of life in the UK anymore. And I think those pressures are hard for us Gen X-ers and above to truly empathise with.

I understand the frustration of having retirement age goalposts moved. And I understand that for some this means genuine and unforecast hardship – means-tested help for those hit by the accelerated timetable in 2011 feels fair. But I observe three things.

The State Pension age has also increased for men. There will be some men born in about 1955 who were expecting to get a State Pension at the age of 65 in 2020 – sorry mate but it’s now 66 so you’ve got to work another year. So if we focus on the most unfairly treated here, it’s not a gender story.
Is this really the best use of £58 billion? If we’re trying to create a fairer society for all, I think it’s very hard to argue that it is.
I do not write this from the position of a Smug Tory. I am not. I have a violent reaction to the sense of misplaced arrogant entitlement which emanates from those quarters. But there’s not a lot to say about the personal finance elements of their manifesto because there basically isn’t one. Say nothing. Promise nothing. Keep your head down.

I know this issue is divisive. It’s unleashed torrents of anger and vitriol on Twitter. Gulp. You can have your say in the comments section below.

If you don’t know your State Pension Age, this tool on HMRC’s website is quick and easy to use. It’s worth finding it out and just parking that fact at the back of your brain – an essential fact for any future planning even if – as we’ve seen – the goalposts could shift again.

Have a good weekend everyone,

Holly

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Comments

#jeremyvine How can I save £27,000 for my pension by cutting back on holidays and meals out when I only earn £20,000 before tax, national ins and pension contributions. I work full time. I have had 1% pay rise in the last 6 years! This is the world of many people!

04/12/2019 10:46:11

1 0

It's worth noting that even on a high salary and paying into a pension plan, a £1 million pension pot at age 55 will bring you an income of £21,000 PA. #JeremyVine show 04/12/2019

04/12/2019 10:37:13

0 0

I agree that the pension age needs to rise and the unfairness between the sexes be addressed. The problem with the current plan is that many women have been given nowhere near enough time to plan for it, for that reason it seems reasonable to me for some adjustment/compensation to be available to those hit hardest by the changes.

01/12/2019 17:16:13

5 0

A lot of people miss one of the main issues re the 3.8 million 50’s women. The majority will have paid National Insurance for 50 years when they get their pension yet you only need 35 years contributions to receive a full pension so what happens to the additional 15 years of payments? More worryingly is the number of jobs that my cohort are blocking by continuing working. Youth unemployment is far too high, surely giving the younger generation a chance to contribute to their future will save on Benefits and reduce Mental Health issues. How do I know? I work on a DWP funded project to support under 30’s into Employment. Many are lacking confidence and have never worked so do not have the skills needed by the Labour market. Some have built up debt via a Student loan after graduating from University with a degree and they still can’t get work. This cost is never factored into the equation. It would be far cheaper to allow anyone whatever their gender to leave the job market at 60 than carry on paying for youngsters to sit at home playing on X boxes becoming more desperate and socially and financially isolated.

01/12/2019 16:10:33

5 0

We are heading for a first-world crisis folks, entirely of our own making. 1. Modern medicine has brought (most of) us a longer lifespan. 2. Even just a couple of generations ago, family ties were stronger, with family members living close enough to each other to keep an eye on frail and elderly relatives. 3. We aren't treating carers with the dignity and respect they deserve - their working conditions are terrible and we are not remunerating them satisfactorily. Thus, most Brits snub their noses at what could be interesting and rewarding work, but rarely is. And thanks to Brexit, we're going to make is more difficult for unskilled workers to plug the labour shortage. 4. Some families are entirely unreasonable with their expectations and demands of local authorities to provide care for a loved one. The care system is on the point of collapse in many local authority areas, and even with selling off a persons assets, councils can't continue to meet the increased demands. Increasingly the answer is 'sorry, there is no care available'. As for a pension, I'm not expecting to get very much at all, despite having contributed to various pension schemes. I fully anticipate the state taking most of my assets to pay for care, which I presume I will need at some point, if I'm lucky enough to live a long life (I'm 51). My personal plan is to stay as fit and healthy as I possibly can; to keep updating my skills and keep myself employable for as long as I possibly can; to save and invest what I can; be nice to my kids; and not expect anything from the state.

01/12/2019 15:40:42

1 0

I don't know enough about it, but my wife is supportive of it being means tested and only applying to those who are most affected by the timeline change. I agree with her, largely on the basis that £58 billion just isn't doable. I also think that this idea of money being 'stolen' is a bit unfair. People lose out massively, financially, by having to invest in defined contributions pension schemes as opposed to those in defined benefit schemes, some people have to invest in something to earn an income, and investments go up and down and sometimes crash almost overnight, eg the Woodford debacle, who many were invested in only because their 'expert' financial advisor told them it was a good deal. There are tax changes that mean people lose money they hadn't though they would, pay rise, promotions and bonuses, all of which might be expected but don't happen. At least these women were told years in advance. Also, women live longer than men, on average, and yet were receiving their pensions five years earlier. In our world of supposed equality, how is that equal? I don't mean to cause offence to anyone, but that's my view.

01/12/2019 14:33:58

1 1

Holly, like (seemingly) all the other financial journalists you have overlooked a very serious financial sting to Labours Compo plans. 1) 4 *million* 50's women opted to pay the maried womans 'stamp. This group paid almost nothing in NI but were told all was OK they would still get a state pension based on their hubbys NI. That's a fantasic BOGOF. Pay for a male (£237,000) state pension and get a FREE female (£267,000) pension. Are these the waspi women who are crying at being mader to wait (up to) 5 years to collect a pension that they paif nothing towards ?. 2) How many of these women workd in the public sector and have nice juicy RPI-linked pensions from age 60 ?. 3) How many of them are living in Spain etc and spending this money outside the UK economy 4) And this is the important one. If a waspi woman retired *after* april 2016 (and not other pension) she will get the much higher flat rate pension, when by retiring at 60 she would have got the lower pre-apr-2016 pension. Over a potentiol 30 year retirement she will be much better off !. If she then gets full compo back to her age-60 date, will Corbyn also REDUCE her pension back down to the lower pre-apr2016 level ?. Why aren't the financial journo's zooming in on this unfaireness ?. The high court is going to swamped with counter claims from men AND women younger than the waspi women who will be paying the massive tax increases to service this £58 billion (and some) largesse

01/12/2019 10:47:49

1 3

I am one of those women affected, born 1955. However, I am comfortably off and feel paying huge sums to all the so-called WASPI women is ludicrous. Target those most in need not the well off.

30/11/2019 20:16:15

3 0

Obviously, all the people that are saying we should work till 66 are probably in desk jobs. I’m a nurse and just had my 65th birthday. I’ve also just had to give up the job I loved due to arthritis and other health issues. It was such a physically demanding job, doing 12 hour shifts, up and down 4 flights of stairs 30 times a day. No lunch time, no breaks at all. We were also not informed about these changes until it was to late to start saving for retirement. I also get really annoyed at programs like question time this week where an author on the panel said we should not be compensated, how lovely to be able to sit and write all day. I’m sure if she had done my job for 47 years she may have had a different opinion.

30/11/2019 18:14:30

9 1

FOI report shows that over £271 billion pounds has been stolen from the NI fund by consecutive governments deciding to not pay into the fund as they should have done in the last 20 plus years....if they had paid the required amount in there would have been more than enough money to have paid us what we are owed it is not the fault of 1950s women who had little or no notice not only have I lost 6 years and £48 K...I have had to use a my life savings to live off being one of those slap bang in the middle born 54 I had to suffer both increases so add to that another £17k it will make a loss of £65k and I still have another whole year add to that the fact that I care for my 86 year old mum with no carers allowance the offer of compensation comes nowhere near my losses but I for one am extremely grateful that at least one party have acknowledged this injustice I'm not against equality but not being told about this massive issue is a disgrace....

30/11/2019 16:49:05

3 1

Very well said Holly. I agree there should be some assistance to those women who have suffered real financial hardship over this change but it is right that equality is being applied to pension age. I was raised not to expect financial assistance from the government and have always saved for a private pension. It's not as wealthy a pension as my husbands but it is mine and I take responsibility for it. This election seems to be full of fanciful promises based on what the media present as the concerns of the voters.

30/11/2019 16:25:14

0 0

To continue on your fair take of the matter,I think that the women should be means tested.Those who can’t find a job,unskilled or unwell should be compensated.Women are at a disadvantage during all their working lives.We should not make sure that get have also a dismally poor end to their lives.Forget the longevity con.We are going to die at the same time as the old boys.

30/11/2019 13:37:36

2 0

Hi Actually, it's fairly obvious where you are on the political spectrum. You know the price of everything, and the value of nothing.

30/11/2019 11:49:30

0 0

It has already been through the high court so this seems like Labour simply trying to bribe these ladies for some extra votes. My bro's wife will just qualify for this free bung, he has to wait until he's 66 for his pension and as it stands I just make it into the 67 group - yes it's all very fair :(

29/11/2019 16:54:52

0 0

We all no that the pension increase as affected women far greater than men as a great deal of us 50s women will have to wait 6 more years( which you failed to mention ) for our state pension Wen a great deal of us wasn't aware until it was far to late unlike this generation who r fully aware so making provisions for it.we agree that the pension age should b equal what we're up in arms about is we were almost encouraged in the early 70s to b the "good wife" and stay at home bring up your children,while the men altho it sounds very dated now we're the breadwinners getting the chance forcompany pensions cars etc so us women unbeknowing to us alot missed out, your talking like the compensation is being giving to us and why should we b allowed it ? 1st we havnt had it yet it's all assumptions at the mo,2nd the government as taken around £8,000 a year away from each of us in my case £40,000 over the 6 years ,u don't mention what the Government as taken or should I say Stolen from us .it wasn't thought over fairly and so us 50s women alot r now suffering from it and we can't all work the amount of hours we used to ,to make a living most will agree by the time u get in your mid 60s u slow down it's a part of aging from what your saying then the work force seems like it's going to slow down if u had your way.

29/11/2019 16:44:34

16 4

Like the USA and the rest of europe pensions are an issue even in the best funded countries or should i say eu states?. The Dutch have a 1.6 trillion pension fund, the best in Europe and they are forecasting a pension fund deficit, and are talking of having to increase payments into this fund. What no one has mentioned is the factor of low interest rates along with G Browns 10% raid on the pension funds of millions of uk citizens. A pension deficit in part has been caused by government policies of abnormally low interest rates, the true cost of bailing out the too big to fail banks. The government forces the pension funds to hold government bonds, as a safe investment but in a lot of cases in europe these bonds are paying negative rates. The uk state pension is lower in the uk than most of europe, whilst a high % of people of state pension age do not receive the full state pension nor anywhere near it. This is a wider issue, than just pensions, and pension age. What country that lives on borrowed money can afford a welfare system including a health service free for the world to use, the entitlement to be kept from the first day of arrival into the uk as a migrant, along with a golden ticket to welfare for life, a place to live, all not earnt. The politics of deflection, it is not the pensioners who have caused this problem, it is the liberal culture of welfare for all that has caused this problem, along with politicians who deem it their right to spend 32% of GDP. Whilst from what we have had presented to us in their manifesto the right to spend even more. Sorry liberals, but from the day we were born, they knew that at 65 x amount of people would entitled to receive a state pension, as they publish the berth rate each year, they collect the figures, and they chose to do nothing, except leave you and i with the problem and resulting bill.

29/11/2019 15:07:40

11 1

My worry is the maths and how they've arrived at £58bn. I think the poorer women should be compensated or make it means tested but some of us are part of the wealthiest generation to live... perhaps our future carers should be the ones to get paid more. Did we bring this upon ourselves shouting for equality with men...

29/11/2019 14:58:14

7 13

Fairer to cancel student debt imo than this. Give those in dire need help the rest I’m afraid will have to work on like my partner and i

29/11/2019 14:48:29

5 7

Yes, another moderate here too. And another liking the balanced perspective. Shame we don't seem to have a party with any chance of winning an election, mmmm

29/11/2019 14:26:55

5 1

The thing is many of these women have suffered with inequality all of their lives and weren't lucky enough to have the opportunities to pay into an occupational scheme. These women had no maternity leave and pay, no free childcare, no equal pay. They were generally at home caring for children and/or elderly family members and had low paid jobs to fit around these commitments. More importantly weren't informed of the changes, this is what the compensation is for, government negligence.

29/11/2019 14:26:01

28 4

I wish I could vote for you Holly. As ever, the facts speak for themselves. Only today, Mr Johnson was asked if he had costed his promise/pledge ensuring no-one has to pay for care by selling their home. Of course, he hadn't. How is it that these leaders persist in selling us a dream that they haven't bothered to price? I am so tired of these empty pledges made by opportunists hoping the people won't scrutinise. The sheer arrogance. Neither of them deserve my vote. To end on a happier note, thank you for your blog and campaign to simplify investments. I love what you do.

29/11/2019 14:04:53

7 3

Is it not te case that although these women will get their state pension later in life, the larger amount will mean that by their mid 70's they will have been paid more than the current womn pensioner gets? Someone published exact figures a while back and I wish I had kept a copy.

29/11/2019 13:46:46

5 6

Well said Holly it is one of the first pieces of writing I have read this week that is not simply a list of sound bites and slogans. Thank you

29/11/2019 13:14:17

5 3

A very sensible perspective as ever, Holly. One question I had is whether £58bn is the full cost of this policy, or just the sum for the life of the next parliament (5 years), i.e. would there be further ongoing payments depending on when people hit their retirement age?

29/11/2019 12:50:05

6 3

OK, fair comments. But you overlook the wider backdrop to state pensions in the UK: 1) They pitifully low - a full state pension is only 29% of average pay, with most other civilised countries providing between 50% and 100% 2) Qualification for a state pension in the UK is not by residency (as in NZ for example) but by accumulating NI credits generally through working. This means that UK women are very poorly provided for, so I fully support the Labour initiative even though funding will be expensive. Most of this money will come back into the economy in any case.

29/11/2019 12:41:00

17 8

Congratulations Holly on your sensible and reasonable comments. Bring back the moderates!

29/11/2019 12:31:01

5 11

I am a member of this cohort and I agree with Holly's comments: we all - the whole population - need to accept and go with the flow on many themes, including increasing retirement age, equality and so on. Yes, communication about the changes was poor, but - to my mind - not a crime.

29/11/2019 12:23:55

14 26

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Holly's Blog: The sting in the WASPI tale

State Pension age edging upwards to 66 next year

By 2060, 6 in 10 people will be 65 or above!

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