Support Women Against Pension Poverty

 

The most recent lengthy Parliamentary debate on women's pensions was on 11 March 2003. Click here to read what was said.

 

Steve Webb MP, the Liberal Democrat Shadow Work and Pensions Secretary, secured a debate on the issue in the House of Commons in May 2000. Click here to read the full debate. The then Pensions Minister Jeff (now Lord) Rooker accepted that:

"The women whose cases the hon. Gentleman has raised are, rightly, aggrieved about the way in which they have been treated. ...There was a form that had to be signed. I admit freely, having read it again this morning, that the form was not brilliantly clear, and I can guarantee that it would not pass the plain English test."

He also stated that: "In cases in which someone has made a genuine inquiry--perhaps in the form of an early forecast requirement--and has been misdirected, there remains the option to buy back in. ...If it appears after evidence has been submitted and we have checked our files that someone has been misdirected or misinformed by my Department, we will consider allowing her to buy back in the contributions that she has missed. In that way, she would be able to regularise her benefits. Successful applicants would be given the opportunity to pay arrears at the rate in force at the time that the payment was due. For some women on low incomes, that could even lead to a refund. ...We are quite prepared to look at each case on its individual merits." (House of Commons 23 May 2000).

 

Since 2000, many women have written to their MPs and had their cases looked at by the Department for Work and Pensions.  However, the Government still maintains that, in general, "married women opting to pay reduced rate contributions made an informed choice." (Ian McCartney, Pensions Minister, in a letter dated November 2002).

 

The Minister for Women, Patricia Hewitt MP, went even further and told the Telegraph that: "The choice between how much you were paying at the time, opted in or opted out, was crystal clear." Click here for more detail.

 

However, Jeff Rooker again admitted that very little advice and information was given out to women about their pension options, right up until the 1980s: "It was as if there was an ordinance that Departments did not give advice - they were not in the advice business....In those days, it was impossible to get through on the telephone and letters were not answered for weeks...The system for responding to the public has been vastly transformed, but in the 1970s and 1980s it was not a customer-friendly service." (House of Commons, 23 May 2000).

 

The Department for Work and Pensions has recently admitted of the original leaflet explaining the consequences of paying the reduced rate, that "Plain English wasn't around when the leaflet was produced." (quoted in the Telegraph, 7 September 2002).

Another controversial issue is whether women were properly informed of changes to the National Insurance system over the years.  These might mean that even if women had made an informed choice to pay the reduced stamp at the time, their decision could easily be overtaken by events. The fact that so many women are now receiving such a shock when they send off for a retirement forecast surely indicates that the changes were not made clear enough to many at the time. For more detail on the changes to the system over time, click here.

 

In his refreshingly frank manner, Jeff Rooker admitted that: "Most people in this country have not got a clue about how the national insurance system works", and yet Dawn Primarolo MP, the Paymaster General has stated that "the reasons why some women chose not to (switch to the full rate, even when it would have benefited them to do so) are a matter for them." (House of Commons 22 June 2000).

 

Indeed the Government does contradict itself from time to time, and exaggerate its points.  In  2000 the then Social Security Secretary Alistair Darling MP said that "The law was changed in 1977 because we did not want married women to pay the reduced stamp as they would lose out in later life." (House of Commons, 15 May 2000).  Yet the Pensions Minister in the House of Lords, Baroness Hollis has maintained that:

"Most women who took the reduced married women's stamp saved thousands of pounds - something like £18,000 for someone on mean average earnings over that time. If such a sum had been invested, it would have produced an alternative return." (House of Lords, 15 October 2002).

Yet when Steve Webb MP asked the Government to clarify this statement, he was told that Lady Hollis "quoted an illustrative example comparing what a married woman would have paid in full and reduced National Insurance contributions if she had earned around £4,000 in 1977 rising evenly to £27,000 in 2002." (Pensions Minister Ian McCartney, 9 December 2002).  The New Earnings Survey 2002 states women's average gross earnings to be £19,937 - nowhere near the £27,000 quoted in the illustrative example.

 

However, the Department for Work and Pensions admits that it shreds old paperwork, and that many women were badly advised over the telephone or face to face.  This means that there is bound to be no written proof in many cases.

 

Furthermore, in 2000, the Government was dealing with a debacle over inherited SERPS, where the wrong leaflets were sent out for more than a decade, failing to tell people that their widows' entitlements would be halved.  In this case the Government adopted the principle that it would accept claims that people had received the wrong advice over the phone or in person, even when there was no written proof:

"There is a very real issue of proof... No record is kept of telephone calls, any more than a record is normally kept of conversations at the desk. Paper records are kept for about 6 months. But if someone asserted that he had received that misleading advice, I suspect it may well be the case that the Government would have to prove that he had not, rather than the contrary, because there would be no evidence to counterbalance it." (Baroness Hollis, House of Lords, 6 July 1999).