Labour’s plan to allow 1950s born women affected by the increase to their state pension age to take their pension two years earlier, has been described as playing to the ‘pensions gallery’.

Commenting, AJ Bell senior analyst Tom Selby said: ““This feels more like Labour playing to the pensions gallery than a serious long-term reform plan. Indeed, many of the women affected by state pension age equalisation will already be in there sixties, so even if Jeremy Corbyn were to get the keys to Number Ten the extent to which those most affected will benefit is shrinking all the time. If the Conservatives cling to power for the next few years and remain steadfast in rejecting calls to help these women then for many this will be too little, too late.

“That said - and we still await precise details on Labour’s state pension age policy - there is merit in exploring options to make the state pension more flexible. Indeed, there is no obvious reason such a reform should be restricted to a specific cohort of women provided it is done on a cost neutral basis. Such reform would tally with the pension freedoms and could be particularly helpful to those in physically demanding jobs.”

The policy was criticised by former Pensions Minister, now Royal London director of policy, Steve Webb as it faces “serious practical problems”.

‘Writing new primary legislation, getting it through Parliament, and implementing the change on the ground is likely to take at least two years. If this legislation completed its passage through Parliament during the 2018/19 session, it would take at least another year to change government computer systems and to communicate effectively to all those who might be affected. By the time the new law could be implemented, most of the women who had the shortest notice of state pension age changes would already be drawing a state pension.
Webb highlighted that under equalities legislation it is unlikely that this new option could be made available only to women.

“In addition, there are serious practical problems with allowing people to opt for an early pension which is permanently paid at a lower level than the full state pension,” he said. “For example, if the scheme is to be cost neutral, they would not be allowed to claim pension credit or other benefits to top up their low income. But if they could not do so then they could be living permanently below the poverty line throughout their retirement.”

Labour’s policy may not be welcomed by the women it would benefit, as Barnett Waddingham senior consultant Malcolm Mclean pointed out. “This seems similar to a suggestion made by the Work and Pensions Select Committee last year. That was firmly rejected by WASPI (women against state pension inequality campaign), and presumably still viewed as falling well short of their demand for interim payments for all the women affected back to age 60.”

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