From Ros Altmann:economist and pensions,
    investment and retirement policy expert

  • pensionsandsavings.com

    Progressive reform agenda to improve quality of life for older citizens, especially women

    Progressive reform agenda to improve quality of life for older citizens, especially women

    Here are some thoughts about urgent policy proposals to improve the fairness of the National Insurance system for women and for the aging population.

    Top 5 policy recommendations:   

    1. Extend triple lock to Pension Credit for oldest, poorest pensioners.
    2. Allow early access to State Pension for ill-health, long service or carers.
    3. Recognise WASPI concerns and address hardship caused by increased state pension age.
    4. Remove National Insurance loopholes that cause women to lose State Pension credits.
    5. Offer free personal social care funded by National Insurance plus incentives for private care saving – modelled on State Pension concepts.

    We will soon see all the Election Manifestos. Of course the issue of Brexit will be important in many people’s voting decision, but there are so many other issues. Here are my top five suggestions to improve the State Pension system, especially for women and the poorest or most vulnerable older people. Plus urgent changes to ensure social provision of old-age care. These reforms would make the system more socially equitable.

    1. State Pension uprating (triple lock or double lock) must apply to Pension Credit for poorest, oldest pensioners: Currently, the triple lock does not protect the poorest pensioners. Social justice would suggest the oldest and poorest pensioners need the best protection, yet this is not happening. Just the old Basic State Pension (£129-20 a week) has the triple lock while the full new State Pension (£168-60 a week) which is only available to the youngest pensioners also has the triple lock minimum 2.5% annual increase or the higher or earnings or CPI inflation. However, Pension Credit (£167-25 a week), the old Graduated State Pension, State Earnings Related Pension (SERPS), and Second State Pension (S2P) are only protected by cpi price inflation. To look after the most vulnerable pensioners, (the majority of whom are women) requires a Manifesto commitment to ensuring Pension Credit is increased by at least the same as the new State Pension. If the triple lock stays, then it should apply to Pension Credit. If moving to a double lock (best of price or earnings rises) then Pension Credit should benefit the same way.
    1. Allow for differences in life expectancy and health in the State Pension – early access to State Pension to reflect poor health or caring or long contribution record: The State Pension age has risen sharply, causing significant problems for many older citizens, especially women who had not anticipated the changes, or are caring for others. Until a couple of years ago, those who couldn’t work, were seriously ill, or caring for loved ones could claim means-tested Pension Credit from age 60. This helped both men and women. However, Pension Credit starting age is now approaching 66. Regardless of health, other income, work capability, caring duties or number of years of NI contributions, older people are left on ‘in-work’ benefits. In addition, just one member of a couple over state pension age would allow Pension Credit application, but now eligibility depends on the age of the youngest partner in a household. Suddenly, many of the poorest over-60s are left to rely on employment benefits, even if it is not realistic for them to keep working. The current system makes no allowances for the vast differences in life expectancy among different regional, social or employment groups. Healthy life expectancy varies by around 19 years across the country, yet the State Pension system will continue to increase the starting age. Unlike in a private pension, you cannot receive a penny early.  Although only 35 years of NI are required for a full pension, but even with a 45 or 50 year record, people must still wait till after the starting age. It would perhaps be fairer to allow early access to State Pension after, say, 45 years of contributions, or to recognise ill-health or caring duties. This would improve the role of State Pensions as part of our welfare system.
    1. WASPI – Recognise hardship for older women caused by failure to adequately inform about State Pension Age changes: The long-running WASPI and Backto60 campaigns about state pensions from the 1950s women needs to be addressed. The anger felt by many of these women, now in their 60s, is understandable. I have campaigned for many years for recognition of the hardship caused by failure to properly inform those affected and also failure to recognise that women have been serially disadvantaged in pensions for decades. I am in favour of equalizing pension ages, but this still leaves women unequal in pensions. I cannot support paying all these women the equivalent of a state pension back to age 60. But I do believe there are many who should be allowed to claim help from the National Insurance system to recognise the hardship they are facing, despite a long NI record, poor health, inability to work or caring responsibilities. Past Governments did not adequately inform the women affected and I hope the parties will consider early payments or Pension Credit for those affected by increased pension ages, to offset some of the hardship caused.
    1. Remove the National Insurance loopholes which reduce many women’s state pension – Child Benefit, low earners, partial year accruals: Many people, mostly women, are losing credits for their State Pension because of wrinkles in the state pension system. In the 21st century, rules should be more flexible to prevent people inadvertently missing out. Women who do not claim Child Benefit when they know they are not entitled to it should not be deprived of their state pension accrual. Similarly, those earning less than the NI lower earnings threshold should still be credited for state pensions. And partial years of contributions should be accrued, rather than so many women losing out on a whole year if only some months of NI were paid. These changes would improve the way National Insurance pensions work for women in particular.
    1. Provide free personal social care funded via the NI system and introduce incentives for additional saving for care: The biggest failure of social policy is the lack of decent provision for elderly care. If Beveridge were designing our National Insurance system today, old-age social care insurance would clearly be included. The state should provide a basic level of care for older citizens who cannot live independently. In our aging population, around 1 in 4 older people will need some care, but it is not possible to predict in advance who these people will be. Therefore, everyone should pay contributions through their life, in exchange for basic care provided should they need it.  In addition, people should all be encouraged to make individual provision to top up state care, in case they want some money sooner, or to have more control over the place and type of care they prefer. Providing feee personal care for those with assessed needs and also incentivising people to save for more than this if they can is based on similar principles to state and private pensions. Indeed, private pensions could be encouraged to include cover for care needs in later life, as well as Care ISAs.

    These proposals could form part of a progressive reform agenda to help the National Insurance system provide better quality of life for older citizens in our aging population.

    10 thoughts on “Progressive reform agenda to improve quality of life for older citizens, especially women

    1. They knew what they were doing .. they knew the hardship they would cause .. FULL RESTITUTION is what needed and do what you should have done at the start .. and bring these changes in over a generation and not change the goalpost … and HAVE the decency to tell people

    2. sorry to be blunt, but it is a bit late for the thousands of women who have died. I feel we should have a pension age of 60 for both men and women. After working hard doing manual jobs for many years our body’s are worn out unable to just keep going. I suppose we should be grateful it is starting to be looked at. We have the poorest state pensioners as shown in the developed world. This is disgusting seeing we are one of the richest country’s. i do worry about the future of pensions. We have seen the maxwell’s the Greens, and of course the government they have robbed us all. There is so much anger and disbelief how it has been allowed to get to this. Just moving the age of retirement is not the answer. And as for social care, having worked in this it is really worrying. Failure to address this is a ticking time bomb. Social Care agencies unable to provide the right care.

    3. Those who were not informed should be compensated..its not fair to help some and not all…no one I know received letters…please offer a compensation package for those who have reached SP that is not means tested otherwise it’s simply not fair

    4. This proposal as outlined is shocking and discriminatory.
      It would be unjust to pay one woman at 60 just because they are seen to be more unwell than another of the same age. How would they prove they are more deserving than someone who has had a long term illness or disability but is not registered disabled and has never claimed for this? Would they be unwell enough to be included?
      Will this be means tested on income, assets or both?
      What about National Insurance being paid by those still working after 60? What about free bus passes and reduced price entry into facilities or events which are dependent upon age? Will those who qualify for your extra help also get these when others of same age do not just because they see entitled to benefits?
      I want my pension to be backdated to 60 and paid.
      I want my NI contributions I have been paid since turning 60 to be refunded.
      I would like to see Pension Credit reinstated.
      I would like to point out single women, those never married, the divorced, separated, usually suffer more financial hardship in old age. I have witnessed this over many years. Women find it harder to get full-time employment and wages as good as those men receive. Discrimination against women is rife.
      Recompense WASPIs then perhaops introduce measures to ensure both men and women can retire with a state pension at 60 or 63 which would be fairer.
      50s born women are taking the brunt of the changes.

    5. These things are all very well and needy people are always a priority BUT A L L 1950’s born women have been robbed and pillaged by successive governments and only want what is ours! If we had been told say 3 year – to 63 and done more gradually – we might not have noticed or caused such a fuss!!

    6. Definitely believe point 2 must be adopted into policy somehow. There is no valid justifiable reason why someone with 45 plus full in years should not be able to obtain a full pension before 66 when only 35 years are needed to qualify. There is no logic in the current rules and it is totally unfair.

    7. 3.8 million women suffered because of the 1995 and 2011 Acts. Yes of course the poorest have to be supported but there are a great number of WASPI women, myself included who have strived all of our working lives to save and never took any State benefits. When they received no notice of the increase in spa they expected their pensions at 60 and have suffered great hardship as a result. I had to sell my property and I know many others have done the same because circumstances, be it Ill health or caring responsibilities meant they could not continue to work. We too should be compensated for the disgraceful maladministration of the government officers. If we had been given sufficient notice we could have made different life choices. We do not claim benefits but we are no less worthy.

    8. Opting to work 6 am to 10 am on four hour shifts every day is the only way to fit caring for elderly parents and picking up grandchildren from school, this is my colleagues life, I work 17 hrs a week and struggle.. I have 45 yrs NI I should be receiving my pension. I am just one of many. Never claimed anything and worked all my life to end up sad and in hardship just because I was born a 1950′ woman

    9. Women born in the 50s…..
      We couldn’t buy a house on our own, only with our husband.
      We were encouraged by the Government to pay half a stamp when we got married.
      We were encouraged to give up work to look after our children.
      We had trouble getting mortgages in the late 70s.
      Interest rates were phenomenonally high in the late 70s, early 80s.
      We have been through property crashes, which has affected what we are worth financially.
      Any savings we might have isn’t worth much because Interest Rates are so low and have been for a very long time!
      We were told any changes in the Retirement Age would not take effect until 2020 and would be phased in.
      As I understand it, the raising of the Retirement Age was accelerated in 2011.
      Like so many ladies born in the 50s I did not receive a letter informing me of the changes, so I always thought I would retire at 60.
      I was due to retire in 2017, what Pension could I or indded all the other 50s ladies have put in place when we didn’t know about it?

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