In her monthly column for Rye News, Hastings and Rye MP Sally-Ann Hart takes a looks at pensions.
When David Lloyd George introduced the state pension in 1908, which took effect from 1909, life expectancy was 51 and the retirement age was 70 (only around 5 per cent of the population were older than that). The Old Age Pensions Act 1908 also had stringent means testing; you had to be poor, and of good character – meaning you could not be habitually drunk, been in prison in the previous ten years or had never worked when able to do so. Before 1909, people depended on saving for their old age with friendly societies, or their only resort might have been the workhouse.
Since 1909, pensions have evolved, with the biggest change in 1948 when the modern state pension system was introduced; available to all and paid for by workers and employers through national insurance contributions – although the women’s pension age was reduced to 60 from 65. Men’s pension age remained at 65, which I always find rather odd as women have a longer life expectancy.
In 1993, the then-chancellor of the exchequer, Ken Clarke, announced that the government would equalise the state pension age at 65, and that this change would be phased in over ten years, starting in 2010. In 2011, to ensure the sustainability of the state pension system, the coalition government accelerated the equalisation of the state pension age and pledged to raise it to 66. This meant that the state pension age for women would reach 65 in November 2018, and the increase from 65 to 66 would happen by October 2020. No doubt our state pension will continue to change in the years ahead as life expectancy has rapidly increased over the past few decades and shows no sign of reversing.
Life expectancy has now risen to 81 and pension age for both men and women is currently 66. The state pension age will rise to 67 between May 2026 and March 2028. This change will affect people born after April 1960.
The government has protected and is supporting the incomes of over 12.2 million pensioners by maintaining the triple lock, introduced in 2011, and intends to continue to do so. There are around 23,196 pensioners in Hastings and Rye, and it is good news that by this government protecting the triple lock they have received much needed pension increases, of 8.5 per cent this month. This delivers on the government’s promise to provide dignity in retirement. The full yearly amount of the basic state pension is £3,700 higher, in cash terms, than in 2010. That is £990 more than if it had been uprated by prices, and £1,000 more than if it had been uprated by earnings since 2010. A full basic state pension is worth over £19 more per week in 2024/25 under the triple lock than if it had been uprated by earnings since 2010.
Further, the personal allowance remains high enough that a pensioner only receiving a full basic or new state pension will not pay any tax on this income. They will only pay income tax if their total income is above £12,570 – the current (tax-free) personal allowance. In 2010 the tax-free personal allowance was £6,475, and since 2010, there are 200,000 fewer pensioners living in absolute poverty after housing costs, as this Conservative government seeks to protect the most vulnerable in society.
To help pensioners with increased costs over the winter, the government delivered nearly 12 million winter fuel payments and pensioner cost of living payments, helping to protect the most vulnerable. 11.9 million payments, worth £4.8 billion, have been made to pensioners across the UK, providing vulnerable households with up to £600 to help with their energy bills this winter.
The government has delivered wide ranging pension reforms that will see the typical pension boosted by £1,000 a year helping people save for their retirement. For example, the chancellor’s ‘Mansion House Reforms’ could unlock an additional £75 billion for high growth businesses, while reforms to defined contribution pension schemes will increase a typical earner’s pension pot by 12 per cent over the course of a career. In addition, the pensions lifetime tax allowance has been abolished, incentivising more experienced workers including NHS doctors, teachers and other professionals to stay in work for longer or return to the workforce.
Finally, a reminder about pension credit which is not given automatically; pensioners need to claim it. It is worth making a claim even if you think you are not eligible – you might be. You may still be able to get pension credit even if you have not paid national insurance contributions, have savings or a small pension, or live with your grown-up family or own your own home. Even a small award of pension credit can open doors to additional help and support – including help with housing costs, council tax, heating bills, a free TV licence for over 75s and extra cost of living payments.
Pension credit provides vital income for our most vulnerable pensioners – averaging more than £3,900 per year. Only 3,459 Hastings and Rye households received pension credit as at November 2022 – there is room to improve local uptake, so please spread the word.
Image Credits: Eliot Colbourne CC .
Women may live longer than men, but not everyone has good enough health. I had a heart attack age 61 after trying the best I could to keep working. Many women were on low pay through the 1970s & 1980s, and often not allowed to join work based pension schemes. Many inequalities in those times, plus the responsibility of (unpaid) caring duties for elderly family members, usually borne by women.
As you know, there are 7,580 (source: House of Commons Library) 1950s-born women across Hastings & Rye. Some were adversely affected by the DWP’s failure to communicate rises to the State Pension age. Many in our area (including me), found out about the change too late to alter their retirement plans and have been affected by this lack of notice ever since.
The Parliamentary and Health Service Ombudsman (PHSO) has found the Department for Work and Pensions (DWP) to have committed maladministration through its failure to adequately communicate State Pension age increases to women born in the 1950s. The PHSO has concluded that the DWP have an opportunity to apologise to women affected, and pay compensation as a result.
Whatever your views on this, I can only share my experience. Lack of notification felt like a social contract had been broken. A timely letter would’ve been so easy for DWP to send. There was no internet in 1993 for Ken Clarke to reach the number of women concerned. DWP apparently took ads in newspapers (one featured two dogs on a beach with speech bubbles?) but not everyone saw them.
My letter came Oct 2012, too late to make any difference. Thankful to women I’ve met from various groups (Waspi etc) who have experienced similar.
Hear, hear Martina. The government hoped that we would ‘disappear’ rather than acknowledge their travesty. They didn’t reckon on the strength of those affected. We’re still here and still wronged.
As a woman born in 1954, I was amongst the millions who had our State Pension delayed by 6 years. So many of us did not have savings or private pensions to ‘fall back on’ and some of the stories of struggles and even suicide by women who could not cope financially are heartbreaking.
Regarding Pension Credit, please don’t get your hopes up: having paid full NI contributions for 43 years, I was denied Pension Credit because I was receiving the highest tier of SP and this took my income to £2 per week over the minimum income and eligibility.
Agree wholeheartedly Jane. Six years is a very long time added to the end of a long worklife. This also affects spouses & partners. Digging deep to keep going and keep going for 6 extra years has taken a toll.
Even lawyers in divorce cases didn’t have correct information, their calculations for women were still based upon retirement at 60.
I was self employed, keeping accounts diligently as taught by my Dad. I lived at the same address for 32 years and HMRC letters were frequent. No excuse for DWP to not inform us. Discovering lack of notice was a depressing blow.
Thankful to everyone who understands this injustice.
Hi Martina, as WASPI’s our unity during the injustice towards us strengthened us and knowing that people like us are experiencing the same wrongdoing helped us to carry on fighting. Although we realised that we probably wouldn’t win our cause (the government will NEVER admit to any wrongdoing in any situation), we still tried our best.
I hope that your quality of life has improved and that you can finally enjoy your well-earned State Pension. Take care and best wishes. Jane
Agree with Martina and Jane on the Waspi Women saga. We all await news of compensation, and Mel Stride wasn’t providing any timescales this week, alas… The other thing that is important to say is that some pensioners are being dragged into paying tax bcs of the freeze in the tax free threshold. So the Triple Lock gives with one hand, the frozen tax threshold takes with the other. And pensioners don’t benefit from the two recent National Insurance cuts…
And it was this Conservative Government who, in addition to not amending the personal allowances to reflect inflation, and decided to reduce National Insurance contributions rather than Income Tax itself (so is of no benefit whatsoever to pensioners). And before anyone mentions that there was a triple lock increase of 8.5% on the state pension, then reflect that the level of state pension paid is amongst the lowest in Europe.
As far as the loss of pension to women born in the 1950s is concerned, then it has now been formally established that the DWP were at fault and didn’t communicate the changes in a timely and proper manner. In fact the Ombudsman has recommended to Parliament that compensation be paid. On a personal level we estimate that this cost my wife, born in 1955, something in the order of £40,000 which she had to make up by living on savings and an inheritance.
My late parents voted Conservative and were enthusiastic members of the Conservative Party where they lived. I used to vote Conservative. Although I am less than enthusiastic about the alternative, I won’t vote Conservative any longer.
Thank you Guy & John for your support and informative comments. Very much appreciated by this 1955 born woman.
On Thursday (18 April) there’s a debate on “Access to Redress Schemes” in the House of Commons. We can only seek to draw our MP’s attention to this.
More info at https://commonslibrary.parliament.uk/resea…/cdp-2024-0077/.
Best wishes to all concerned.
As this thread was written by the MP for Hastings and Rye I hope she will be supportive. The rights and wrongs have already been determined – it is only how the obligations of the DWP will be fairly discharged that is in question.
What I can’t get my head round is the government say people are living longer and the pension age has gone up but the drivers licence still has to be changed at 70 ,must be missing out on something!!
Just because people are living longer, this does not necessarily mean that they continue to enjoy good health during their additional years. Age 70 remains a very good time to check on someone’s ability to continue driving. All that is required is to respond to some questions about health. If that remains good then driving can continue as before.
If anything, the process should be tightened up, in order to identify that small proportion of older motorists who should no longer be on the public road.
All the help any government can give to pensioners is well received, I also acknowledge the issues that many women have had, and which are commented upon. My mother was when she retired as a nursing sister at Orpington Hospital. When she retired the Country had entered Europe which impacted dramatically on the downward value of her pension.
There are many issues that have not been spoken about during this run up to the General election, what if for example the council bands are altered on our houses or changes in valuations are made, these will impact on All our pensions. Such actions will not just impact on the older generation, but the young trying to get a house.