Tuesday, 19 January 2016


1908 - age 70
The first state pension in the UK was the Old Age Pension. The law was passed in August 1908 and the first pensions paid on 1 January 1909 to around 500,000 people aged 70 or more. It was 5/= (five shillings or 25p) a week and was paid in full to individuals aged 70 or more with an annual income of £21 a year or less reducing to nothing at an annual income of £31 a year.  A higher pension of 7/6 (37.5p) was paid to a married man. At the time only one in four people reached the age of 70 and life expectancy at that age was about 9 years.

1925 - age 65
In 1925 a new kind of pension was introduced based on contributions paid at work by both the employer and the employee. It was paid from age 65 without a means-test. A married couple's rate of pension was paid if both spouses were aged 65 or more. That meant men whose wives were younger than they were had to wait for some time after they reached 65 to get the higher rate for their wives.

1940 - men age 65, women age 60
In 1940 pension age for women was cut to 60 to try to ensure for most couples that the married rate would be paid as soon as the husband reached 65. 

1948 - retirement condition added
From 1948, men had to retire as well as reach 65 to claim the new Retirement Pension paid under the National Insurance scheme. If their wife was still under 60 when they reached 65 and retired they could now claim a dependant's addition for her. When she reached 60 she could claim a married woman's pension of around 60% of the full rate. 

1995 - women's state pension age to be equalised
Following pressure from Europe, the Conservative Government under John Major was forced to announce plans to equalise state pension age for men and women. The decision was put off at least once for fear of adverse public reaction. The timetable for change was the most relaxed possible and would raise pension age for women from 60 to 65 over a ten year period from 6 April 2010 to 6 April 2020.

2007 - rises for men and women to 66, 67, 68 planned
Rising life expectancy led the Blair Labour Government to pass a law to raise state pension age to 66 between April 2024 and April 2026, then to 67 between April 2034 and April 2036 and to 68 between April 2044 and April 2046.

6 April 2010 - women's state pension age begins to rise
The first women are affected by the equalisation changes. Women born 6 April 1950 to 5 May 1950 have to wait until 6 May 2010 to reach state pension age, a delay of up to one month.

Entitlement to Pension Credit for men and women became linked to women's state pension age rather than the age of 60. A similar change restricts entitlement in England only to free bus travel. Entitlement to Winter Fuel Payment is also linked to women's state pension age and the qualifying date for the payment in winter 2010/11 moves to 5 July 2010. It would then rise by six months each year.

May 2010 - further change promised
In opposition the Conservative Party had announced it would raise pension age for men and women more quickly than existing plans. After it came to power in the Coalition government with the Liberal Democrats in May 2010 this pledge was repeated in the programme for government set out in the Coalition Agreement.

"We will...hold a review to set the date at which the state pension age starts to rise to 66, although it will not be sooner than 2016 for men and 2020 for women."

October 2010 - revised changes
The commitment in the Coalition Agreement fell foul of EU equality laws which allowed the government to equalise state pension ages as late as April 2020 but would not allow further discrimination between men and women during that process. So in the Spending Review of October 2010 the plans were revised. Women's state pension age would now be raised more quickly to reach 65 in 2018 and then both men and women's pension age would rise to 66 by 2020. Critics pointed out that plan breached the Coalition Agreement promise of 'no sooner than...2020 for women'.

2011 - Pensions Bill sets out the planned changes
In February 2011 the detailed timetable for change was announced in the Pensions Bill 2011. Women's state pension age would rise to 65 by November 2018 and then men and women's pension age would rise together to reach 66 by 5 April 2020. Five million men and women would face a later state pension date. But while men would have to wait at most another year, 500,000 women would have to wait longer than a year. The wait for 300,000 would be 18 months or more and 33,000 would have to wait for two years.

Widespread protests and rebellions in Parliament - which the Government defeated - led to promises by the Secretary of State Iain Duncan-Smith to introduce some 'transitional' changes to help the most severely affected women. But the Pensions Bill went through almost all its stages in Parliament with no details of what the Government would actually do.

On Thursday 13 October 2011, the last possible date, the Government announced its plans. It would cap the delay for women at 18 months. It kept the rise to 65 by November 2018. But would then stretch out the transition from age 65 to 66 for both men and women by an extra six months. It will now be completed in October 2020. The concession will cost £1.1 billion (at 2010/11 prices), half of which will be spent on stretching the timetable for men, none of whom had complained.

On Tuesday 18 October 2011 the House of Commons accepted these changes and despite a further attempt in the Lords to make further amendments the Pensions Act 2011 became law on 3 November 2011.

April 2011
In April 2011 the Government began a consultation on how it should bring forward the change in state pension age to 67 and then 68. That consultation closed on 24 June 2011.

29 November 2011
In the 2011 Autumn Statement the Chancellor George Osborne announced that the rise in the State Pension Age to 67 would be brought forward eight years to run from April 2026 to April 2028 instead of April 2034 to April 2036. That change will save £60 billion.

5 December 2013
Two years later, the 2013 Autumn Statement announced the principle "that people should expect to spend, on average, up to one third of their adult life in receipt of the State Pension."

It warned that would bring forward the rise to 68 which was announced in the 2007 Pensions Act. 

"This principle implies that the increase in the State Pension age to 68 is likely to come forward from the current date of 2046 to the mid 2030s, and that the State Pension age is likely to increase further to 69 by the late 2040s." (1.122-1.123)

And admitted that one purpose of this change was to save money

"Along with action this government has already taken on the State Pension age, [this change] could save around £500 billion from pension expenditure over the next 50 years."

A paper setting out the principles also said that in future people should have at least ten year's warning of any change in their state pension age.

The changes were set out in the Pensions Act 2014 and the Government set out the timetable of the 2011 and 2014 changes.

A review of state pension age was promised by spring 2017.

March 2016
On 1 March 2016 the Government set out the Review's terms of reference and John Cridland, ex-Director General of the Confederation of British Industry, was appointed as its chair.

It is clear from these terms of reference that the principle of people spending a set proportion of their adult lives on state pension had been abandoned. Para 2.2 says the Review will consider "Whether the current system of a universal State Pension age rising in line with life expectancy best supports affordability, fairness, and fuller working lives objectives."

It was also clear that cost was a major consideration "These recommendations should be affordable in the long term" (para 1.1).

And the principle that there should be one state pension age for all was being abandoned "the review is to have regard to: Variations between different groups" (para 2.3). That leaves the way open for pension age to vary with postcode as life expectancy does; with occupation; or even with education - should someone who starts contributing at 16 reach state pension age earlier than someone who does not start until 21?

The Review will report to Government by January 2017 and a decision will be made by the Chancellor George Osborne before 7 May 2017 (para 3.1). Perhaps in the 2017 Budget.

14 April 2016
Version 1.52