Successive governments extended a 1983 “men only national insurance subsidy” for 35 years and broke a promise to women born in the 1950s to offer them similar terms
More than 4.65 million men aged over 60 have had the last five years of their national insurance contributions paid by the state, the Department for Work and Pensions has disclosed.
The scale of the payments has been kept quiet by the Department for Work and Pensions for 37 years. It was only revealed last week when Myfanwy Opeldus, one of 3.8 million women facing now a six year delay to get her pension, got the admission from the ministry through a Freedom of Information request. She is a BackTo60 supporter and had been pursuing the government over this issue
The scheme was launched by the Thatcher government in 1983 when it was reeling from large scale unemployment even after its popularity had soared through victory in the Falklands War. Extraordinarily the scheme was only wound up in 2018 just two years ago and 35 years after it was launched.
The scheme- called auto credits – was announced in the 1983 Budget by the late Sir Geoffrey Howe , then Chancellor of the Exchequer, as one of four measures to get down the unemployment count which was over three million.
In his March Budget he announced:
“Some 90,000 men between the ages of 60 and 65 now have to register at an unemployment benefit office if they wish to secure contribution credits to protect their pension rights when they reach 65. From April, they will no longer have to do this.
Even if those concerned subsequently take up part-time or low-paid work on earnings which fall below the lower earnings limit for contributions, their pension entitlement will be fully safeguarded. ( my emphasis)”
Unemployment did fall and was half that level by 2018 when the scheme was dropped.
Yet neither successive chancellors Nigel Lawson, John Major , Norman Lamont,Kenneth Clarke , Gordon Brown or Alistair Darling did anything to repeal it.
In fact under Kenneth Clarke in 1993 the opposite happened. He decided as 50s born women were going to face waiting longer for their pensions, they should get some help. This was adopted by Labour in a leaflet issued in 2002 on pensions which announced it would be extended to 50s women from 2010 when the pension age for women started to rise.
But the Brown government then reneged on this in 2009 after the financial crisis.
Promises to 50s women reneged
An explanatory memorandum to changes in pension legislation said :
“When the Government published its plans for state pension age equalisation in 1993, the intention then was that as women’s pension age increased gradually to 65, autocredits would become available to them on the same basis as for men. This was in part to compensate for the increase in the number of years women would otherwise have to pay National Insurance contributions for in order to qualify for a full basic pension.
” This approach has since been reviewed, for two reasons. Firstly, the qualifying age for Pension Credit (the income-related benefit currently payable to men and women at 60 without jobseeking conditions attached) is set to increase to 65 by 2020 in line with female state pension age. Without the proposed change, autocredits would increasingly apply mainly to people who could afford not to work or claim benefit….
“Secondly, the reduction in the number of qualifying years needed for a full basic pension to 30 and the improvements in the crediting arrangements for carers under the measures introduced by the Pensions Act 2007 will mean that the need for autocredits to protect state pension entitlement will be significantly reduced….
” This instrument amends the Credits Regulations to provide that autocredits will be available to men only for the tax years in which they have reached what would be pension age for a woman of the same age, up to and including the last tax year before the one in which they reach age 65. Men born on 6 October 1954 or later,…, will not qualify for the credits.”
This meant it was phased out in 2018.
Meanwhile the new Tory and Liberal coalition elected in 2010 decided to raise the pension age further to 66 and also planned a new pension raising the qualification period to 35 years. The main architect was the pensions minister , Steve Webb, who moved a top job at Royal London Insurance. In an article in the Telegraph in September 2017 he backed men who could have overpaid NI contributions to claim the money back. He is now a financial consultant with Lane Clark and Peacock.
Yet another scandal
Now this entire scandal is yet another example of unfair treatment to 50s women.
The woman who raised this with the DWP is one of a number who has not got enough national insurance contributions to get a full pension. She falls short by three years and will have to pay them £3000 to make up the years to get another £400 a year.
A man – one of the 4.65 million who was covered by auto credits- would have to pay nothing. That is hardly fair. And he could take a low paid job and still not pay NI contributions as they would be covered by the state.
More seriously it does knock a hole in the DWP case that the raising of the pension age was an equality measure to create a level playing field with men.
It is hardly a level playing field if men on this huge scale are getting their national insurance contributions for free. What started as a measure for 90,000 ended up helping 4.6 million. No wonder the DWP were not happy to have to disclose this.
Roll on the appeal to the judicial review brought by BackTo60. Michael Mansfield could have a field day with these new facts.