A fair state pension for all?

Every few years the government announces its intention to fundamentally reform the pension system once and for all to ensure it is fair and sustainable for current and future generations. Each of these attempts is made with good intentions and with the hope that the changes will last. However a few years down the line the next government decides it's time to try again. I'm already working on my fourth pension bill since beginning work for Age UK.

Successive governments are compelled to grapple with the pensions system to catch up with societal changes such as increases in life expectancy, changes in working patterns and to counter structural unfairness. For example several of the state pension reforms in the 2007 Pensions Act sought to ensure that the pension system better reflected the lives of women who often have some time out of employment caring for children, older family members, or working part time.

The compelling reasons for reform under the current proposals were to create a system which is intended to be fairer, simpler and more sustainable. Under the single tier system individuals will receive a state pension based on their own contribution record of up to £146 in today's money if they have a full record of 35 years contributions.

Age UKis supportive of these efforts because generally those who will benefit from the changes will be people with low lifetime earnings and those who have had time out of the labour market due to unemployment, caring or disability. Around two in five women and one in six men reaching state pension age in 2016 after the changes will get a higher pension. However since these proposals were first mooted we have pointed out that some will lose out.

There is one group, mostly but not exclusively women, who we think are being particularly unfairly treated in these changes; those people who have been expecting to use their partner’s record to receive a state pension or to increase the amount they receive on their own record. This will no longer be possible and while there will be protection for some this could still leave up to 40,000 people with lower pensions. We think that those people with a legitimate expectation of receiving a pension based on their partner’s contributions and who do not have sufficient time to adjust their plans should be provided with at least the same amount as they would have received under today's system.

Whilst hundreds of thousands of men and women struggle to manage on insufficient income in retirement it is crucial that the government takes every opportunity to ensure that the safety net of the state pension provides everyone with a defence against a retirement spent in poverty.

Read Age UK’s Pensions Bill Second Reading briefing

Hannah Pearce, joint Head of Public Affairs at Age UK