WASPI guide to stolen state pensions: did you know?

WASPI guide to the 6-year State Pension Age rip-off by Trudy Baddams

JOIN OUR FIGHT — 1950’s WOMEN PENSIONS — DID YOU KNOW?

1. Your wife, your mother, your grandmother, your sister, your auntie will now have to wait until they reach 66 before they can retire?

2. In 1940 in fairness to men the women’s pension age changed to 60 because married men had to wait until the wife turned 65 before he could retire, this allowed the couple to enjoy their retirement together.

3. In the late 60’s / early 70’s the 50’s women embarked on their journey into work. They paid the same percentage contribution towards National Insurance as men but didn’t earn equal pay. When they reached 18 the also contributed to the Graduated Pension until it later merged with N.I.

4. When the 50’s women began paying their dues they were told they could retire at 60.

5. When the 50’s women married they had a choice, they could continue paying the standard rate of NI entitling them to benefits and retiring at 60 in their own right, or opt for the lower ‘married woman’s rate’ but would have to wait until their husband reached 65 before they could retire.

6. So, women of the 50’s have been paying NI for anything from 35 – 44 years believing they would retire at 60 or at the very least until the husband retires.

7. Did you know the chancellor has been holding onto £30bn of NI contributions and government says they can’t afford to pay our pensions at 60 even though we’ve been paying all these years and continue to pay and they have this surplus just sitting there?

8. So, despite paying our dues, now the government is refusing to pay our pension at 60.

9. The government have played on our goodwill, and have breached their verbal, social, legal contract. We kept our side of the contract and have paid up to retire at 60.

10. Apparently labour introduced an increase of pension age to 65 in 1995 but failed to inform the women of the 50’s who would be most directly affected, the government failed its legal duty to inform all women personally of this change, they tried to get away with this by stating they didn’t have any current details, except they forget that they have all details from PAYE, us women still received all our NI demands and self-assessments as well as any tax or child benefit details, so they do have out details, they just failed to carry out this legal action. They also tried to get away with this by saying they put adverts in magazines (I’ve yet to see) and pension pack were available for anyone who requested them.

11. The legal contractual duty according to the Pension Advisory Service is that the provider MUST inform its clients of any changed, the government failed to do this on 2 occasions and they decided without consulting us of any changes to increase our pension age to 66 thus every 50’s woman is losing anywhere between £35,000 - £40,000 in the pension they were contracted to receive.

12. The change to women’s pension age was blamed on the EU, this is simply not true, it was labelled ‘unfair to men’ and had to be equalised, but hang on; did we not do the ‘fair’ bit in 1940? And other European countries are not equalising and some are reducing pension age Poland for example, not as wealthy as us, the 6th richest country.

13. When the government called to change the pension age they promised a relaxed transition but we’re now looking at working an EXTRA 6 years, not the 18 months MP’s keep stating in their interviews. This is hardly fair to women when men only have to work an EXTRA 1 year.

14. We do not dispute that men and women should be equal in everything including their pension age but it has to be done fairly.

15. Looking back to the 1940 issue and continuing now, women in general marry men a few years their senior, this change in pension age has turned the tables on fairness, we are now seeing men retiring earlier than their wives, this is unfair especially to those who opted for the ‘standard rate’ NI to retire at 60 in their own right.

16. 50’s women who have reached or are nearing 60 have had no time to change their plans, many finding themselves unemployed and in the clasp of the jobcentre with workfare, work programmes, working for their benefits as they are claiming Job seekers allowance, or they find themselves on ESA and its strict regime of sanctions. This is no way to treat women who have done the ‘right thing’ who have paid their dues, and who are entitled to their pension.

17. A pension is not a benefit and for Mr Cameron and others to say there are other benefits to claim, we don’t want benefits, we don’t deserve to be treated this way, going to the jobcentre cap in hand. Signing on at 60 is degrading and insulting.

My Story
I started work at the age of 16, I married at 17 and I was verbally offered the married rate NI, mentioned above, the company accountant sat and explained that if I continued to pay the ‘standard rate’ I would be able to retire at 60 in my own right, as my husband was 3 years my senior this was a good option for me, rather than waiting until he reached 65 when I would be 62, so that is what I did and paid the standard rate since then. I will now be retiring 3 years after my now ex-husband, how is this right? This is NOT what I signed up for; this is not what I paid all my NI contributions for. Women are now retiring later than their husbands in a situation where the government are trying to make things fair they are making it extremely unfair to women.

So I can no longer retire at 60 despite all those years of expecting to do so, I now have to work an EXTRA 6 years, I cannot even retire at 62 as if I had paid the ‘married woman’s rate’ so in my case, this is extremely unfair. The government say no-one will have to work anything over an EXTRA 18 months, this is simply not true.

So I have paid NI over 44 years for a pension at 60 which I will not be getting, I continue paying NI for a pension I will not receive and I will continue to pay for a further 6 years. Why am I still paying for something I will not get? Why have I paid all these years for something I will not receive?

Instead of settling into my retirement next year at 60, allowing my husband in his ill-health to cut down on his hours, and taking care of our grandchildren, helping my daughter out with ‘free’ childcare while she works, we’ll be denying our grandchildren and ourselves the right to a family life as they are dumped at costly childminders. My husband will have to continue working his long hours now we’ve been denied my pension at 60, denying us a better quality of life.

I have done the right thing, please reverse the decision and give us our pensions at 60, give us the respect we deserve.

The link to my newspaper interview
Mrs T Baddams

See also:

July 2018: The rape of the National Insurance Fund A draft prepared by Tony Lynes as a basis for a National Pensioners Convention factsheet on the National Insurance Fund

Waspi busts the myth of State Pension Age "equalisation": Waspi fact file

WASPI women's pensions were in surplus but RAIDED: restore our pensions

Osborne clobbers low paid freelancers and deals fresh blow to women born in the 1950s in Budget 2016

No way to treat a woman: Waspi case study video exposes state pensions rip-off.

Hansard on the Waspi debate in Parliament, 1st Feb 2016.

WASPI women are the first line of defence in the government's war on state pensions — YOUR state pension.

Waspi busts the myth of State Pension Age "equalisation": Waspi fact file

Trudy Baddams' open letter to the Guardian on WASPI and their stolen pension years; "We Paid In, You Pay Out.”

There are several aspects to the 50’s women’s pensions and I have broken them down below.
1. In the mid 1960’s – early 1970’s when the 50’s women began their journey into work and contributing to Graduated Pension and National Insurance the pension age was 60 for women and men retired at 65.

2. From 1925 – 1940 women’s pension was equal to men’s at 65, but because women usually married men a few years their senior, it was believed that this was unfair on married men as they had to continue working until their wives reached 65 also, so in 1940, in fairness to MEN, the government changed the women’s pension age to 60 so the married couple could enjoy their retirement together. The government at the time showed compassion.

3. Nothing has changed, women still usually marry men a few years their senior.

4. Women continued to pay Graduated Pension contributions until it was phased out and merged with National Insurance.

5. Paying National Insurance contributions entitles the contributor to some benefits and old age pension, unconditionally and with no means testing.

6. Women of the 50’s didn’t have the opportunities men had and didn’t enjoy the life style of women folk of today, they didn’t even have equal pay, still don’t, they had no choice but to pay their contributions by law at the same rate as men.

7. So single women worked their way through life, from the ‘60’s/70’s making their contributions and their employers matching these contributions, anything from 9% - 12% of their wages just like men. They entered into the pension contract in the knowledge they would retire at 60. They have paid for their pensions and other benefits as required by law, they’re not expecting anyone to pay for them, they have contributed to their pensions for some 45 years and are still contributing today.

8. Up until the 1970’s married women were given the option of paying the lower ‘married woman’ rate of NI, sometimes referred to as the 2p rate, this dis-empowered women as they would not be entitled to certain benefits and their pension age would be based on when their husband reached retirement.

9. But married women who married before the ‘70’s who opted to continue paying the ‘standard NI rate’ the same as men were entitled to all benefits and were entitled to retire at 60 in their own right.

10. Those who married and had children were often frowned upon if they worked, they were expected to stay at home, look after the children and become housewives, looking after their husbands and household too, men were the breadwinners, the wage earners. Mothers tended to find small part-time jobs such as dinner ladies, or cleaners to fit in around the children’s school hours and holidays just to add a couple of bob to the family purse, often these jobs were under paid, and didn’t have the equal pay commission on their side in those days, or a national minimum wage, often they were scant hours with no tax or NI responsibility.

11. Mothers and carers were covered by the ‘Home Responsibilities’ credits, for example mothers were covered for 16 years while they looked after their children.
So, the above are the bullet points relating to the history of women’s pensions. That is how things were, the law of the land from 1940, men retired at 65 and their wives and single women retired at 60 in fairness to men. Now let’s look at the present and the future shall we?

A. We now learn that in 1995 the government decided to revert back to the 1920’s and bring back the age of retirement to 65 for both men and women in fairness to MEN again, but no sooner than 2020. This rise was blamed on the EU at the time and the EU was happy with a relaxed transition and other European countries don’t have equalisation and indeed some are bringing down the pension age for men and women, it was not an EU directive at all.

B. The government said it personally informed all those affected by this change, as is legally required, but this was not the case, very few, if any, actually received any notification of any change, this is being blamed on the fact that the government departments did not have up to date contact details for the women involved, but I hasten to add that these women still received their NI demands for payment, their self-assessment forms for their self-employment and their child tax credits, child benefits and their working tax credits, so the lack of up to date contact information is questionable, and most women were unaware of this change in law. Out of the blue women were finding they had to work an EXTRA 5 years, giving no time to make adjustments to their life styles to take this change into account.

C. In 2007 the government passed yet another law, again on the quiet, not informing women or men that the pension age would increase to 66 but not before 2024 and 2026. Women all of a sudden would have to work an EXTRA 6 years while the men only had to work an EXTRA 1 year, in fairness to MEN.

D. In 2011 Women’s state pension age would now be raised more quickly to reach 65 in 2018 which breached the coalition agreement promise of ‘no sooner than 2020’ women's state pension age would rise to 65 by 2018 and men’s and women’s pension ages would rise to 66 would be rushed through by April 2020.

E. The pension age is based on life expectancy at the time, for example the life expectancy of a woman my age (1 year off the original retirement age of 60) is 86 and the government says we should all be able to enjoy 1/3 of life in retirement, which would make my retirement age 58, but the pension age as it stands with this new law at 66 would create a life expectancy of 99 years, someone somewhere has made a grave mathematics error.

The above points are the here and now, this is where women stand at this point in time, while men only have 1 year EXTRA to work and in fairness to MEN, equalisation, 500,000 women will have to wait longer than a year, 300,000 the rest of us 50’s women have an EXTRA 6 to wait for our pensions despite the facts pointed out in the issues above.

So looking at the facts alone it is clear discrimination of women vs men, in fairness to MEN the law was changed in 1940, again the law changed in fairness to MEN in 1995, nowhere do I see any fairness to WOMEN, all I see is discrimination, women staying home looking after the children, not working, keeping house, women earning a pittance before the equalisation of wages, and before the introduction of the minimum wage, working and paying contributions towards their pensions, but now 45 years on they are being denied what that have paid into. These women are still paying for their right to a pension. Many have paid over the odds as married women opting to pay the ‘standard rate’ in order to retire at 60, clearly as Baroness Altmann says this pension has been mis-sold by the government to women of the 50’s. If women are not going to get their pensions at the age agreed when they began paying then the government has no right to collect any further contributions and has a duty to repay the overpayment to the women who have over-paid for a service they will never receive.

It is the responsibility of the government to ensure that everyone understands the system, it is not the young paying for our pensions and it is wrong for the government to imply this, it is us, we have paid in and we want our entitlement, this is not a benefit this is something we have paid into all our working lives under the assumption that the government would honour its side of the agreement as we have done, as our employers have done.

Government have a duty of care to its people, women are suffering at the hands of governments policy, they are unable to work, they are in the hands of the jobcentre, they are in training or work experience, this far down the line when they should be enjoying their retirement with their family.
We Paid In, You Pay Out.

It is also wrong to say the money isn’t there we all know that the NI pension fund should have been ring-fenced, and that the government have had their fingers in the pot as there is only £30bn left, but this is enough to begin paying what is due to us 50’s women.

There have been rumblings that the government would like to ‘help us’ we don’t want ‘help’ we want what is rightfully ours, and talks about deals, so we can ‘retire early’ we don’t want to ‘retire early’ we want to retire at the age we were told we could retire when we entered into this agreement. ‘Lower life time’ rate has been discussed but this just adds to the discrimination, we have been discriminated against all our lives, to have to draw a lower rate of pension than our menfolk is utterly wrong when we’ve all paid in the same percentages.

It is cheaper to pay a woman her pension at the agreed date she began paying her dues, than it is to fund a young unemployed family, release our jobs for the youngsters, allow us women to retire at the age we agreed when we began our journey in our working life of contributions, look after the women who never stood a chance of accumulating the necessary years of contributions as their caring responsibilities didn’t allow them to work, to build up their credits, the mum’s who had children, they were allowed 16 years of home responsibilities credits but this has now changed to just 12 years, those who are looking after disabled children or elderly parents, of those who were housewives looking after their husbands and not working, relying on their husbands NI who have become widowed.

Women have planned for their retirement to look after their elderly parents or their grandchildren or volunteer in the charity shop, this government has stripped the country of its army of grey volunteers in its greed, costing the taxpayer thousands in caring, in childminding. It’s time for change, for respect for the 50’s women, some of us 60 something ladies have been found wanting, some on workfare working for jobseekers allowance, lost their dignity, lost their will to live as their old bodies are cracking around them and they can’t cope with the hard graft day in, day out, some go cap in hand to the jobcentre for benefits, and some go to foodbanks, some have sold their homes, this is degrading when they have done everything required of them all their working lives, this is a serious matter and needs to be addressed now, not in a months’ time, it needs urgent attention, we didn’t choose to be born women and I thought discrimination against women had been stamped out, this government has brought it back on the biggest platform ever, this is an issue which affects every man, woman, child, grandchild, boy, girl, mum, dad, sister, brother, those in need of voluntary services, it’s time to go back to the drawing board, time to wake up and understand we will not give up, time to pay up.

As Ros Altmann says we were not given notice and have had no time to make changes to our retirement plans. Men are now retiring earlier than their womenfolk, the system has gone full circle in 'fairness to men' without a thought to the womenfolk, some men are having to work on longer as the 'expected' wife's pension is denied and the joint income including the man's pension isn't enough to cover household bills.

On a personal note, I was going to retire next year at 60 because I paid the ‘standard rate’ of NI, had I paid the married woman’s rate, my retirement age would then have been 63 as my first husband was 3 years my senior, paying the ‘standard rate’ all these years has made no difference to my retirement age whatsoever I find I have to work until I’m 66 no matter what. But my present situation is slightly different, I was hoping to receive my pension at 60, not long to wait, my 59th birthday this week, that way my husband who suffered a ruptured Abdominal Aortic Aneurysm a few years ago is finding it difficult keeping up with his full time work, he tires easily, the plan was to cut his hours to suit his needs when I retire next year, with the sudden changes in pension ages he will have to continue to work full time until we both reach 66 or if this fatigue worsens he will have to think about claiming benefits.

So all those years I paid into a system believing I would retire at 60 and now at 59 I find I am not, and still this government is taking my NI contributions at the ‘standard rate’ but the goalposts have changed beyond reach. All those years paying into a system which would look after me and mine in my retirement, except governments have reneged on the deal we entered into when us 50’s women began our journey into work 40 odd years ago, the government owes us, they are in breach of contract.

Women of the 50’s are strong we will continue our fight until we get what is ours by right.

We Paid In, You Pay Out.
Trudy from Somerset"

See also:

July 2018: The rape of the National Insurance Fund A draft prepared by Tony Lynes as a basis for a National Pensioners Convention factsheet on the National Insurance Fund

WASPI guide to stolen state pensions: did you know?

No way to treat a woman: Waspi case study video exposes state pensions rip-off.

WASPI women's pensions were in surplus but RAIDED: restore our pensions

Osborne clobbers low paid freelancers and deals fresh blow to women born in the 1950s in Budget 2016

Hansard on the Waspi debate in Parliament, 1st Feb 2016.

No way to treat a woman: Waspi case study video exposes state pensions rip-off.

This video explains the adverse effects the State Pension Age (SPA) changes introduced by the 1995 and 2011 Pensions Acts are already having on 1950s-born women just three years into the ten year timetable.

As the former pensions minister Stephen Webb pointed out in 2014, pensions are not a benefit. You have paid for this right through National Insurance Contributions.
“Absolutely rightly, it is yours by right, you have paid your national insurance contributions. There's a certain amount of stigma about claiming benefits, when people draw their state pension that's not how they think of it."

However, I disagree with the Waspi organisation's conclusion that acceptance of the raised State Pension Age for women is the only way forward. Women earn only about 80 per cent of men's income so any description of this SPA hike of 6 years with little notice as "equalisation" is brutally cynical. And how many jobs are there for women aged 60 to 66? Britain has one of the worst pension systems in the wealthier developed world and we should not accept a race to the bottom in the 4th/5th/6th richest economy on the planet, especially when there's money for bank bailouts, wars and expensive vanity projects such as the proposed Garden Bridge over the river Thames, or HS2.

I trust that Jeremy Corbyn, the Labour Party and a significant swathe of cross-party MPs, will defend the most vulnerable in society and support the WASPI APPG. But bring back the 60 year SPA.

See also:

July 2018: The rape of the National Insurance Fund A draft prepared by Tony Lynes as a basis for a National Pensioners Convention factsheet on the National Insurance Fund

Waspi busts the myth of State Pension Age "equalisation": Waspi fact file

WASPI women's pensions were in surplus but RAIDED: restore our pensions

Osborne clobbers low paid freelancers and deals fresh blow to women born in the 1950s in Budget 2016

No way to treat a woman: Waspi case study video exposes state pensions rip-off.

Hansard on the Waspi debate in Parliament, 1st Feb 2016.

WASPI women are the first line of defence in the government's war on state pensions — YOUR state pension.

WASPI women's pensions were in surplus but RAIDED: restore our pensions

I love it when we women work together. A fellow WASPI has sent me the following illuminating submission to the Work and Pensions Committee from Rita Abrahams, which is crying out to be read far and wide.

Ms Abrahams has done a sterling bit of detective work and calculated that not only are we NOT a drain on the state, as the Tories insist, but that our state pension pot was showing a surplus year after year. She also tackles the NICs sleight-of-hand, which has been largely ignored or overlooked by the powers that be.

The government has cynically used the mask of "equality" to steal tens of thousands of pounds from some of the poorest in Britain: around £40,000 for some of us when you take into consideration the soaring cost of NICs to replace the Class 2 contributions abolished by George Osborne in his last budget. One serious step towards a meaningful equality would be to ensure women receive equal pay rather than the 80 per cent of men's income that we average.

And let's not forget that the super-rich have tripled their wealth since the 2008 crash.

I hope there will be a legal challenge, perhaps some sort of class action, if we don't receive our fair pension. I admit to a lack of confidence in the pensions minister, Baroness Ros Altmann, who, far from proactively fighting our corner, has belatedly had to be dragged into the spotlight, suggesting that the best we can hope for is a slightly earlier pension age at a reduced rate. The crumbs are getting smaller.

Written evidence from Rita Abrahams (ESP0178)

I would like to start with asking the following question of the committee, before the debates in February and March how many read the Government’s Actuary report on the National Insurance Fund which was issued on 25th January 2016?

I raised this question for the very simple reason that the financial position of our National Insurance Fund might not have been accurately referenced, in fact it might not have been referenced in any of the debates which is very worrying as that’s the account which pays out contributory benefits such as the State Pension.

Many who wrote, talked and voted against the motion questioned how could the Government fund the request of WASPI, here just two of those quotes: Marcus Fysh (Yeovil) (Con): It would be unfair for us to continue to burden younger generations with extra taxes in order to make more concessions than we have already.

Richard Graham (Gloucester) (Con): When I explain to women born in the 1950s that state pensions are paid out of normal expenditure, not some magical pot of gold from NI contributions, and that our (1950s generation) pensions will be paid for by our children and grandchildren’s taxes, they all get the point.

Such remarks would indicate that the Actuary report’s wasn’t considered before the vote, in fact other remarks would indicate little knowledge of how our National Insurance Fund actually works. I hadn’t realised but basically our National Insurance Fund was set up as a pay as you go system; its income comes from National Insurance Contributions and expenditure can only used to pay for contributory benefits such as State Pensions, a working balance of 1/6th of annual expenditure is required to be kept in the fund for emergencies.

The latest Actuary report published in January projected that by April 2021 our National Insurance Fund will have a balance of £58 billion; thus after setting aside the working balance requirement of £18.52 billion (1/6th of payments) a surplus would remain of £39.48 billion.

The surpluses over the working balance for each of the next 5-years roughly breaks down as follows.

2016-2017: - £ 9.78 billion
2017-2018: - £ 3.85 billion
2018-2019: - £ 5.65 billion
2019-2020: - £ 9.10 billion
2020-2021: - £11.10 billion

I question how many who voted against the motion knew of the projected £39.48 billion surplus and if they did then why did they not raise that most important fact as evidence during the debates, but if they hadn’t known about the latest Actuary’s report then doesn’t that make a farce of the vote.

Therefore, contrary to belief there would be no requirement to increase general taxes going forward or use funds that have been set aside for other projects since that £39 billion is a totally unexpected surplus as in January 2015 the Actuary projected a fund value at April 2020 of only £10.62 billion so not even enough to cover the working balance; the Actuary’s latest projections for April 2020 now stands at £46.299 billion.

Importantly to note is that by October 2020 both women and men would have reached the new SPA of 66 and at the end of that same financial year in April 2021 our National Insurance Fund surplus is still projected by the Actuary as increasing at a very high rate and in that year alone it will receive £11.7 billion more in receipts than it is paying out in
benefits. Thus, shouldn’t this have been used as evidence during the debates into the WASPI petition as this casts a totally new and opposite perception on affordability?

Consequently, as any surplus within our National Insurance Fund can only be used for contributory benefits then if we use it for the purpose it was designed and collected for then it’s a cost neutral win-win situation not only for those affected but also for the country.

When recycling our National Insurance Fund’s unexpected surplus to those disadvantage by the age equalisation act it will also help to stimulate the country’s economy, some will see it’s way into the Government’s purses though taxes, some will retire when they had planned so giving up a job to a younger person, some being carer’s to older and younger family members and the many other positive results that has been mention during the debates.

And to better understand why we should be first utilising the surplus in our National Insurance Fund before placing the cost onto those who had been disadvantaged by the mismanaged communications I would like the committee to consider and comment in their report on the following.

Prior to the 1995 Pension Act SPA remained constant for over 50-years so one can justly classify any increase in the SPA as being a significant change and as such wouldn’t one expect to be notified in a timely manner?

In the White Paper Equality in State Pension Age published in December 1993 CM2420 it states within chapter two the following:
2.1 In developing its proposals for implementing the change the Government has paid particular attention to the need to give people enough time to plan ahead and to phase in the change gradually.

2.2 The change will not begin to be implemented until 2010. This lead-in period of over 16- years allows plenty of time for people to adjust their plans.

Part I of the Pension Act 1995 which applies to all occupational pension schemes (not the State Pension) sets out in Section 67 a number of limits on what type of changes can be made to ones pension. The Pension Advisory Service describes that section in the following terms.

“Over the lifetime of your pension, it's possible that your employer or trustees may want to make changes to your pension scheme. If this happens, you should be consulted if the changes affect how you build it up. Unless you agree, any change should not alter the benefits you have already built up. In addition to various pieces of legislation, the rules of your scheme will outline what your provider can and can't do. It's important the rules are followed. If they are not, the changes may be invalid. In broad terms, unless you give your written consent any changes can't worsen benefits you’ve already earned”.

The equalisation of State Pension Age was covered within Part II section 126 of the same 1995 Pension Act, but no reference or rules were listed to how State Pension changes should be communicated to all those affected.

The Pension Act 1995 was also the result of many pension scandals such as the Maxwell affair which brought about various investigation’s such as the Goode report in 1993, a Social Security Committee report in 1992 and a White Paper in 1994.

The Goode Report commented on cases where “pension scheme members have suffered from unfair treatment, inadequate and misleading information and delays in the payment of contributions and benefits.”

While the Social Security Committee stated, “Members should have the right to information about their scheme which is 'succinct, easily understood and timely.”

I picked out the above examples from the many within those reports so to not only highlight how the Government wanted all occupational pension schemes to be administered but also that those creating the 1995 Act and also those voting on it might have taken for granted and therefore presumed that similar communication requirements were already set in place within the State Pension Scheme.

Evidently, the requirements to adequately notify SPA changes to all those affected were either not followed or there were no requirements/rules laid down at all; either way it highlights how the same 1995 Pension Act successfully laid down notification rules to members within Occupational Schemes but failed when it came to notifying members within the State Pension Scheme.

Consequently, when reading in the White Paper for the need to give people enough time to plan ahead so to adjust their plans I believe MP’s would have assumed that women would be notified soon after the act was passed; had it been known before the vote that the very first batch of individual letters would actually be delayed by 14-years then wouldn’t MP’s have requested additions to the State Pension rules so similar to those rules governing occupational pension schemes on notification of significant changes?

The proposals within the reports leading up to the 1995 Act of timely informing people were clearly not followed through and there is now more than enough evidence to come to the conclusion that the communication was mismanaged, this clearly disadvantaged women born after 1950 and that lead to a financial loss and hardship in so many ways; one of those being the opportunity to contribute into a pension scheme for over a 15-year period so to help fund an expected retirement at 60.

Admittedly not everyone could afford making additional pension contributions but at least everyone affected would have been given that choice and opportunity and when taken up tax relief averaging over 25% would have uplifted those 15-years of contributions for a basic-rate taxpayer plus increases from their investments.

When also considering the rule governing occupational pensions, which the Pension Advisory Service states in broad terms, unless you give your written consent any changes, can't worsen benefits you’ve already earned, then clearly the accrued benefit that I had built up in my SP and payable from the age of 60 was not only drastically reduced but it was without notification and also my consent; one rule for one and a different rule for others comes to mind, but in fact maybe no rule even existed for the State Pension.

Thus a cost neutral outcome would clearly not be seen as a fair conclusion and therefore before someone takes this to the courts wouldn’t it be advisable to classify this as it is, a real financial loss and thus similar to PPI and the financial and pension mis-selling which compensation has and is still being paid out?

I suggest the committee looks further into the National Insurance Fund projected accounts by the Actuary at: https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/494 930/53430_GA_UpRating_Report_2016_Accessible.pdf

And here are some facts to be going on with.
1) Our National Insurance Fund (NIF) holds the contributions of the National Insurance Scheme which is funded by compulsory contributions on earnings, paid from employees, employers and the self-employed, plus interest on its investments and is used exclusively to pay for social security benefits such as state retirement pensions.

2) A fixed proportion of our National Insurance Contributions (NICs) goes directly to the National Health Service (NHS); this allocation is paid directly by HMRC into the NHS account.

3) NIF is like a current account and is kept separate from all other revenue raised by national taxes and the Government has no powers to use NICs to fund anything else.

4) NIF is operated on a pay as you go basis so this years contributions pays for this years benefits.

5) In 2003 there was a 1% increase in NICs, but the full 1% increase went directly into the NHS account and wasn’t proportionally split as one would expect into both our NIF and NHS accounts.

When looking at the years prior to and after the 1% increase in 2003 one can see a dramatic boost that almost doubled the amount of our NICs that was directly transferred by HMRC into the NHS account.

NHS allocation funded from NICs between 2001-2015

2001-2002 - £7.8 billion
2002-2003 - £8.0 billion
2003-2004 - £14.9 billion
2004-2005 - £16.8 billion
2005-2006 - £18.4 billion
2006-2007 - £18.9 billion
2007-2008 - £21.0 billion
2008-2009 - £20.7 billion
2009-2010 - £20.3 billion
2010-2011 - £20.4 billion
2011-2012 - £20.6 billion
2012-2013 - £20.5 billion
2013-2014 - £20.8 billion
2014-2015 - £21.5 billion

If the 1% increase in our NICs had instead been shared out in the same proportions, as before, then between 2003 and 2015 our NIF account would now have a surplus of over £100 billion more than the working balance.

Unfortunately, it seems that the Government at the time decided that our NIF did not required extra funding; maybe it’s time to reverse that decision and share out our NICs in the same ratio as it was prior to the 2003 change. Admittedly that would mean less being transferred from our NICs to our NHS and therefore that shortfall would need to be made up from our general taxes but that would be more appropriate as all taxpayers would be contributing into this and not just working people under the state pension age who are the only ones liable to pay NICs.

It could appear to an outsider that the Government in 2003 did in a way act similar to Maxwell, using our benefit contributions to increase funding in a total separate business and in doing so might have helped in the perception that the state pension system is in the long term unaffordable and thus the SPA had to increase and for some at a quicker rate. Thus, has our Government been mismanaging our NIF, maybe they need to look into using our NICs in at least the same proportions as it was in 2002 so to delay future SPA increases.

During 2020-2021 (so after SPA equalises at 66) our NICs will raise approximately £153 billion, of that around £30 billion will be transferred into the NHS fund with the remaining £122.8 billion being transferred into our NIF, payments for benefits will be £111.126 billion as estimated by the Actuary leaving a surplus in that year alone of £11.674 billion.

I might be naive but maybe its about time to have two-totally separate forms of deductions with no cross-over so our NICs would only pay for our contributory benefits while the NHS would only be funded from our general taxes that all taxpayers contribute into? This has to be a much fairer system all round, understandable by all and if that scenario took place in 2021 there could be a surplus of over £41 billion in that year alone and clearly with that sort of annual surplus NICs could be reduced and/or further SPA’s increases could be shelved. Yes, there would be a resulting shortfall in the NHS accounts but then all taxpayers no matter what their age so including pensioners, whether working or not would correctly manage that NHS shortfall and therefore helping all age groups towards a fairer State Pension.

Call for written submissions addressing the following points.

What would be the short-term and long-term fiscal impact?
When using the surplus in our National Insurance Fund there would only be positive impacts, one example would be that some would find its way back into the Governments purse through personal tax.

What would be the other costs of the scheme?
If using our NIF surplus it’s basically only the cost to administer and due to the unequal and limited surplus each year there’s a need to find a simple no frills package which might include only one choice to defer, so if chosen deferral has to be until ones SPA as per the 2011 Pension Act and there would be no increases such as the 5.4% p.a. bonus for each year of deferral. Also NICs would still be payable for those still in employment up to the ages within the 2011 Pension Act.

Could additional costs be incorporated in the reduction factors used to achieve long-term fiscal neutrality?
No requirement if the NIF surplus is correctly used.

How should the scheme interact with pension credit and other benefits?
As currently with any State Pensions in payment.

How could uncertainty within the system be budgeted for and managed?
Currently around 20% of NICs is transferred into the NHS fund with 80% into our NIF, if in 2020 we revert to the 2002 percentages so with around 12% going into the NHS fund and 88% into our NIF then that would give our State Pension Scheme an extra uplift in just that one year alone of around £12 billion. And if the Government ran it more like a company pension scheme so all NI contributions went into our NIF and none to the NHS then that would result in an extra uplift that year of around £30 billion and when added to the expected balance at the end of that year of £58 billion, that’s a massive pot of £88 billion and some £70 billion over the working balance. Clearly this would be a much simpler, fairer, manageable and understandable pension/benefits system, which would result in not only lower NICs from employer and employee but also possibly placing on hold any further SPA increases. Obviously the NHS shortfall would need to be funded from general-taxes but that’s payable by all tax payers no matter what their age.

How are similar schemes managed in occupational pensions?
No answer required if our National Insurance Fund surplus is used, but worth noting that occupational schemes would not have got into this predicament due to the 1995 Act governing communications.

Who should be eligible and why?
All who’ve not received 10-years notice of a change to their SPA, so including both men and women, thus men 55 or older who’s not received notification should still be allowed to take their State Pension at 65 and women 50 or older who’s not received notification should still be allowed to take their State Pension at 60.

How popular would the scheme be among the people eligible?
When using the NIF surplus for what it was collected for then it would be immensely popular and also to their families as it would help in caring for both the younger and older members of those families.

What impact would it have on the lives of the people eligible?
Positively and in so many individual ways and to name just two, less stress and financial worries.

Link to the Governments Actuary’s report on the projected position of the National Insurance Fund over the next five financial years which was issued in January 2016. https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/494 930/53430_GA_UpRating_Report_2016_Accessible.pdf

The table below is taken from page 33 of that report which shows the improvement in the fund from the previous year’s report, note the difference with a fund balance at financial year end in 2019-2020, the previous report was £10.622 billion; the latest report issued in 2016 is £46.299 billion and by April 2021 there’s a projected balance of £58.002 billion.

This unexpected surplus which had not been referenced at all during the debates clearly resulted in a misguided conclusion, that compensation for the WASPI ask was unaffordable and consequently the only option put forward was an early retirement but of a lower Sate Pension so to be cost neutral to the fund.

Rita Abrahams — My Brief History.
Born August 1954
Started full time work August 1969 at the age of 15-years and 2-weeks.
Gave birth in 1982 and after a short break of 4-months returned to part-time work.
I gradually increased my working hours and by 1990 had returned to full-time work. Received at my request a State Pension Forecast dated 10th December 1993 with a SPA of 60.
Reason for submitting this evidence, I never received a follow up statement to indicate there had been a change to my December 1993 statement; this was a major error and failing by the DWP.
Found out about SPA increases from a newspaper report in 2011.
Unexpectedly made redundant in 2015.
Spent about 3-months on Job Seekers, felt belittled, uncomfortable and stressed, now doing voluntary work.
Trying to hold off drawing my company pension due to reduction factors so living off my savings.
Finally and to this day, I have never received any personal notifications with regards to any of the significant changes made within any of the Pension Acts, but at my request I recently received a State Pension forecast.
April 2016

Hansard on the Waspi debate in Parliament, 1st February 2016.

July 2018: The rape of the National Insurance Fund A draft prepared by Tony Lynes as a basis for a National Pensioners Convention factsheet on the National Insurance Fund