Women born before 6th April 1953 won’t get the flat rate state pension of £144 a week, under current plans.
Since the government announced its plans to introduce a flat rate pension (or ‘single tier’ pension, as they prefer to call it), I’ve had dozens of emails from women who are furious that they won’t qualify for it, despite the fact that men born on the same date will. Today (19th March 2013), the Pensions Minister said that the flat rate state pension would now be introduced on April 6th 2016, not 2017 as was the case under the original plans. But many women will still miss out.
Why women won’t get the flat rate pension
First things first – the government’s plans for a flat rate state pension are just at the planning stage. However, as things stand:
• The introduction date is planned to be in 2016. The flat rate state pension would be paid to women who reach state pension age on or after April 6th 2016 at the earliest.
SAVVY TIP: The way the flat rate state pension will work is that women (and men) who reach state pension age on the date it’s introduced, or afterwards, will be entitled to receive it. Women who reach state pension age before it’s introduced won’t qualify for it – even if they delay their retirement or put off claiming their state pension.
• Women who reach state pension age before then wouldn’t receive the flat rate state pension.
SAVVY TIP: Women born on or after 6th April 1953 will be entitled to the flat rate state pension in 2016, under the government’s current plans. However, men born from 6th April 1952 will be entitled to it. The reason is that women’s state pension age is rising from 60 to 65, and their state pension age will be 63 and three months by April 2016, not 65.
• Women who don’t qualify could lose around £38,000 in pension payments as a result. This assumes that they live for 20 years after receiving the state pension and that they would only have been entitled to the basic state pension under the current system. However, they gain over £9,000 because they receive their state pension almost two years earlier than men, so overall will be around £30,000 worse off. This doesn't take into account they pension they will lose as a result of the increases in state pension age from 60.
SAVVY TIP: Under its original plans, the government said it wanted to introduce the flat rate state pension in 2015. This was always only ever an aim and not a policy, but by moving the introductory date back, Malcolm McLean pensions consultant with Barnett Waddingham, says more women will lose out. "Had they gone with the original introductory rate of 2015, a lot of women would have qualified for the flat rate state pension who will now miss out on it."
Can this be challenged under equality legislation?
Unfortunately, the state pension is outside the scope of equality legislation. My understanding is that it would be difficult to bring a legal challenge on the grounds of discrimination.
Instead, I think the best approach is to raise the issue in parliament, via your local MP. You can find out details of your local MP on the Parliament website.
Why women born in the 1950s are disproportionately affected
Women born in the 1950s have already had two changes to their state pension, which will mean they get less money.
• The state pension age of women born after 5th April 1950 started to rise from 60 to 65 from April 2010. As I write this, the state pension age for women is around 61 and a half, and is gradually increasing. This was announced in the 1990s, but so badly publicised that many women didn’t realise their state pension age was rising until they neared retirement age.
• The second rise in the state pension age, from 65 to 66, will affect women born on or after April 6th 1953. These women will see their state pension age rise a second time and - because of the change announced on March 19th - will now qualify for the flat rate pension.
WHAT THE GOVERNMENT SAYS: I asked the Department for Work and Pensions for a response, and they gave me a statement from Steve Webb, the Pensions Minister: "Women born in the period between 1952 and 1953, will receive their state pension up to three years before a man born on the same day, which could be worth up to £16,750. People can be reassured that while [the] Single Tier [pension] is a different system, it is no more generous overall than the one it replaces."
SIGN THE PETITION: There seem to be a couple of e-petitions about the introduction of the flat rate state pension and what it means for women born between April 1952 and July 1953. Here's one petition which I'd encourage you to sign.
Calculate your state pension age
Use the Pensions Advisory Service state pension age calculator on SavvyWoman's Budgeting tools section.
Confused about the flat rate state pension? Read on!
Will you be affected by the government's plans to raise the state pension age to 66?
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