Labour has announced a policy to compensate some of the women who lost out as a result of changes to the pension age.
The campaign for compensation has been led by the group Women Against State Pension Inequality (Waspi).
Under a Labour government, women born between 6 April 1950 and 5 April 1955 would be paid £100 for each week of entitlement lost.
Those born between 6 April 1955 and 6 April 1960 would receive smaller amounts.
Labour’s Angela Rayner told BBC News: “The government failed the women who were born in the 1950s. They stole their pension.”
The maximum compensation would be £31,300, with an average payment of £15,380.
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There are two parts of the proposed compensation: one for the changes made in 1995, when it was decided that the state pension age for women should increase from 60 to 65, and one for the changes in 2011 when the increase to 65 was accelerated and an increase to 66 was scheduled.
The chart below shows how the 1995 and 2011 compensation combines to give a total up to the maximum £31,300.
Consider, for example:
- A woman born in February 1955 who would have been expecting to retire aged 60 in 2015. But in 1995 when she would have been 40, this was changed to 65 – so she would be retiring in 2020. Labour is proposing to give her about £25,000 for this change. In 2011, the ground shifted further for her when the government said she wouldn’t be able to get the state pension until the age of 66 in 2021. For this, Labour is promising her about £6,000.
- On the other hand, a woman born in May 1960 would have expected to retire in 2020. In 1995 this was postponed to 2025. The act in 2011 meant she wouldn’t be able to get the state pension until the age of 66 in 2026. Labour says she had long enough to prepare for each of these changes and will get nothing.
Labour has produced a calculator for affected people to check how much compensation they could receive.
Labour says the policy would cost about £58bn, paid in instalments over five years.
But it disputed suggestions that this would prevent it meeting its fiscal rule that it would only borrow money to invest, despite not having said where the money would come from.
Labour’s John Healey told BBC News: “This is not normal government spending – it’s not a regular spending commitment – that’s why it wasn’t costed as part of our grey book exercise.”
The grey book is the document Labour released alongside the manifesto that has costings for all day-to-day spending.
“Just as government always has a contingency fund or a system of funding… one-off spending, which can’t be built and shouldn’t be built into regular budgets,” he said.
Nonetheless, it is clearly going to have to be funded either through borrowing or taxation and it will push up current spending.
While governments do have contingency funds to pay for things like emergency responses, £58bn would be an unusually large payment, and it would be hard to describe the payments as a contingency when the party has decided in advance to make them.
Conservative minister Nicky Morgan told the BBC “there isn’t the money available” to compensate the Waspi women.