Pensions Bill

I support Amendment No. 2 and will speak to Amendment No. 3. Both seek to address the problem of people who work beyond state pension age but have incomplete records. Who are those people likely to be? They will obviously be anyone with an incomplete BSP. Currently, only 25 per cent or so of women reach retirement age with a full BSP in their own right, as opposed to drawing on their husband’s contributions. Anyone—man or woman—with an incomplete second state pension would also benefit. Many women are partnered with men a couple of years older who would expect to continue to work until they are 65. A woman may therefore wish to continue working for a couple more years until they can retire together and therefore may want the opportunity to continue to build her pension. If, under current law, her breaks in record were within the past six years, she could buy added years under voluntary class 3 contributions. If they were, say, 10, 15 or 20 years ago, she could not. In any case, she would not be allowed to buy S2P and as, once even the 30-year rule for BSP is in place, she would still need a minimum of 43 years to get S2P full accrual, she may decide that a payment, for example, of 11 per cent on her earnings above the primary earnings threshold is a prudent investment, not just for her BSP but to get the additional £1.50 a year per year accrual value of S2P. We say that we want to encourage women to work longer, and the pension age is being raised to 65. We say that we want to encourage women to build pensions of their own and to enjoy S2P as well as BSP, yet we do not allow them to do it. Why on Earth not? I may be quite wrong on this, but I suspect that my noble friend may suggest two arguments. First, he may suggest that by deferring her BSP the added increments a woman gains will outweigh her losses on her incomplete record, but that is to compare oranges with apples. Why should the one be offset against the other? Why should she not both build a full pension and enjoy the increments if she defers? My noble friend may also suggest—certainly, it was an argument in the other place—that this provision would make a woman a less attractive employment option for employers, so it is kinder not to allow her this choice. Of course, it would be permissive and it is a judgment that she, rather than the state, could and should make for herself. In any case, why should employers get a woman’s labour on the cheap? Why should they save on their national insurance bill, which they would have to pay for anyone else, at the cost of a woman building a more adequate retirement income? Once pension age has been equalised, employers would have no such choice for those years between 60 and 65. They would have to pay the rate, including national insurance, for the job. I point out to my noble friend that the current system is, again, to some degree, unfair to women. A man may retire at 60, play golf and be given freebies—over and beyond any golf cups or caps—of auto credits. We, the state, give a man free contributions towards BSP between the ages of 60 to 65 on his state pension, while he plays golf. However, a woman admittedly can draw her pension from 60 years old, but she is not allowed to pay for contributions of her own even though her financial need may be far greater than a man’s. If we support the principle of extended working lives; if we support the principle of no discrimination against older women; if we support the principle of encouraging people, especially the low paid, to build their own pensions; and if we support the principle of encouraging people to avoid needing to turn to means-tested benefits in later age, I hope the Government and the Committee will support an amendment like this.