Holly's Blog: The sting in the WASPI tale

By Mike Narouei, Content Producer at Boring Money

29 Nov, 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.

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.

  1. 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.

  2. 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.

  3. 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