Campaigners have lost a significant legal battle against the government's handling of the rise in women's state pension age.
The retirement age for women rose from 60 to 65, in line with men, and will go up to 66 by 2020 and to 67 by 2028.
Women born in the 1950s argued that raising their pension age 'unlawfully discriminated against them on the grounds of age, sex, and age and sex combined' and left many of them financially worse off because they were not given enough time to adjust to the change in when they would receive their state pension. The campaign group BackTo60 bought the claim on behalf of women affected by the pension changes.
The judges disagreed, however. In a summary of the court's decision they said: 'There was no direct discrimination on grounds of sex, because this legislation does not treat women less favourably than men in law. Rather it equalises a historic asymmetry between men and women and thereby corrects historic direct discrimination against men.'
The decision marks a significant loss for campaigners, including Women Against State Pension Inequality (WASPI) which took the Department for Work and Pensions to court.
Up until 2010 women received their state pensions at 60 but the age has been gradually rising since then. While most campaigners said they support pension age equality, they argued that the government was discriminatory in the way it had introduced it.
Women who thought they would retire and receive a state pension at 60 found that they would have to wait longer, with some waiting for more than five years. Those affected were born in the decade after 6 April 1950, while some women who were born from 1953 onwards have had four to six years of state pension payments taken away from them.
Unison's general secretary Dave Prentis called the judgment “perverse”. He said: “This is a terrible blow for the millions of women who will have been hoping for a very different outcome today. The decision to hike the state pension age with next to no notice didn’t just throw their retirement plans up in the air, it also left many women on lower incomes really struggling to make ends meet.
“It seems perverse that the Department for Work and Pensions had no obligation to inform these women of this significant change,” he added.
The campaign group BackTo60 said it would appeal the decision. Joanne Welch from the group said: “They can’t knock us back. We’ve got a fierce and powerful armoury behind us. As well as the 3.8 million women affected, we have the support of 215 MPs, Unite, Unison, TUC and others."
However, chair and employer director at Ensign Rory Murphy said the ruling highlights that people should not rely on the state pension alone for retirement savings. “The ruling on this landmark case will be deeply unsatisfying for those women driving the BackTo60 campaign. Indeed, the stories of the women missing out on money because of the rise in state pension age are heartbreaking in many cases,” he said.
“Unfortunately the High Court's decision highlights the need for individuals to 'look out for themselves' when it comes to saving for retirement and reiterates that no-one should rely on the state pension to provide them with the funds required to manage in later life.”
Employers should take the ruling as an opportunity to educate employees about pensions and savings, added Murphy: “As the state pension age continues to rise, the ruling... should propel employers in implementing a progressive pensions provision that supports the interests of their people and industries. We must teach the value of saving from a young age, be more open about exactly how much individuals need to save and how they can maximise their savings through their pension, as a duty of care to the population and to avoid welfare issues in future.”
Steven Cameron, pensions director at Aegon, commented that the current situation comes down to a failure to communicate the changes. “The millions of women affected by the increase in state pension age have had to face a significant change to their lives and retirement aspirations. For such a huge change there needs to be very clear, timely and personalised communications and clearly there were failings here,” he said.
However, he said that bringing women's pension age in line with men's was necessary to avoid a financial burden on other workers: "Had the state pension age for women not been brought in line with that for men and indeed the common age increased further as is now happening, at a time when we are on average living longer, it would have placed a massive and unsustainable extra burden on the working-age population, whose National Insurance contributions pay today’s state pensions.”
He added that making the state pension flexible in the same way that private pensions now are since the introduction of drawdown in April 2015, could help address the issue women are now facing. “In an era where private pensions now offer the flexibility to take as much or as little out from as early as age 55, there would be merit in offering not just affected women but everyone regardless of gender the option to take their state pension a few years early – subject to it being set at a reduced level to reflect it being paid for longer," he said.
"While many would argue this doesn’t go far enough to address the hardship a generation of women are facing, it would at least offer more options to choose from.”