Pensions - Articles - Labour plans for reduced state pension face serious problems


Labour shadow work and pensions secretary Debbie Abrahams is set to announce plans for women born in the 1950s to access a reduced state pension at the age of 64. The proposal is described as ‘cost neutral in the long run’ and the party says the change should be made ‘immediately’. But Royal London director of policy, Steve Webb has warned that the proposal 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 continued: ‘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. 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’.

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