Implement optional early drawing of a reduced State Pension for the 1950s women

The Government must provide a timely solution to women affected by the WASPI/WASPI Voice issues who have no entitled income for up to 6 years as a result of the way increases to the State Pension Age were implemented leaving many with insufficient funds to meet their existing financial commitments.

All suggested solutions have been rejected by Government.

The principle of early drawing of a reduced State Pension has been raised by the Pensions Select Committee and John Cridland (Interim Report Oct 2016).

Pensions Minister, Richard Harrington commented “We're waiting for the Cridland Review's final recommendation … perhaps give people more flexibility as to when they retire, depending on their personal situation.” (Good Housekeeping, March 2017).

Inaction isn’t an option.

The gradual equalisation of State Pension age (SPa) at 65 was first set out in the Pensions Act 1995.This was necessary to meet the UK’s obligations under EU law to eliminate gender inequalities in social security provision.

The increase in SPa to 66 was set out in the 2007 Pensions Act (PA) and due to increasing life expectancy the 2011 PA accelerated this process to allow for a rise to 66 for all by 2020 and equalised the SPa at 65 by November 2018.

During the 2011 PA the Government made a concession worth £1.1bn which slowed down the increases to SPa so no one would face an increase of more than 18 months compared to the 1995 PA. For 81% of these women the increase will be no more than 12 months. This concession benefited almost 250,000 women who would otherwise have experienced delays of up to two years.

It is unclear whether reversing the 1995 PA would be legal under current equality legislation. The requirement to take account of equality between men and women in framing new legislation means that any new transitional provisions aimed just at women runs the risk of legal challenge. It would certainly be unaffordable. As of 2010, without equalisation, women would have spent on average 41% of their adult lives in retirement, compared to men at 31%.Even after equalising women’s SPa with men’s, women will spend on average around 2 years more in receipt of their state pension because of their longer life expectancy. Women reaching 65 in 2018 are expected to live until 88.9 whilst the figure for men is 86.7 years.

The early retirement option at a reduced rate, even if it were actuarially neutral, would result in additional cost to the state from the loss of taxes. There are wider impact costs on the economy; adding one year to working lives would result in sustained increases to GDP of over 1%.If GDP in 2015 had been 1% higher, £18 billion would have been added to the economy.