I firmly believe people who have worked hard all their lives deserve security in their retirement. That is why the Government has applied a ‘triple lock’ to the basic State Pension, which is now £1,100 per year higher than in 2010. For those reaching State Pension age after April 2016, a new State Pension is being introduced at a single, flat rate of £155.65, which will also be triple locked. All those women affected by the 2011 State Pension age changes will receive this new pension, which is much fairer to women than the current system and will mean 650,000 women will receive an average of £8 per week more in the first 10 years.
Equalising the State Pension age was necessary to meet the UK’s obligations under EU law to eliminate gender inequalities in social security provision. The Pensions Act 1995 legislated for this to be done gradually after 2010. Following sharp increases in life expectancy projections, the Government had to accelerate this process slightly in the Pensions Act 2011 to secure the sustainability of the system.
The Government did listen to concerns raised at the time of the 2011 adjustment, and I am pleased that as a result the maximum increase was capped at 18 months relative to the 1995 timetable. That represented a £1.1 billion concession, helping those women affected with the transition to a higher State Pension age. Making further transitional arrangements would not only complicate the system but could also cost taxpayers many billions of pounds, and the potential cost of reversing the 2011 changes has been estimated at £39 billion.
With regards to the debate in the House of Commons on 7th January 2016, the motion was an opportunity for MPs to put forward their views and for the Government to respond to them. It was not in any way binding on the Government.
25.1.16
