This piece first appeared in The Daily Telegraph on 20 February 1999
The text here may not be identical to the published text

Having to survive with less

Severe case of widow's pique

More than fifty thousand newly widowed women a year will lose an average £1100 from their annual widow's pension under changes which start in just over a year's time. Government figures given in Hansard say that a woman whose husband dies on April 5 2000 will get a supplement averaging of £33 a week - £1716 a year - based on her late husband's earnings. It is paid on top of her retirement pension or widow's pension. But if her husband dies a day later on April 6 the supplement will be just £624 a year - a cut of £1092. The change will save £60 million in 2000/01 and hence around 55,000 widows will be affected. But when it is fully in place in 2020, the savings will be an extraordinary £2.2 billion, affecting more than a million widows.

The new rules were put in place 13 years ago by the previous Tory administration. The Labour Opposition at the time were scathing about the changes. In a parliamentary debate in 1986, the present Leader of the House of Commons, Margaret Beckett - then a frontbench spokeswoman on social security - said "There is nothing constructive about taking away half of people's pensions" and recommended a timely smothering in order to boost a widow's income.

"There is an abrupt change...between those who are widowed on 5 April [2000] and on 6 April. I advise anyone who is married to a man who is lingering on 5 April quickly to shove a pillow over his face, because it will halve the pension entitlement if the husband dies on the following day." (Hansard, Standing Committee B, February 27 1986).

Asked by The Daily Telegraph if she stood by this advice, and indeed what her husband Leo thought about it, Mrs Beckett chose not to answer. Instead she issued a statement through her office

"This decision was taken more than ten years ago. The Government's new welfare reform package is setting a completely new framework for all these benefits. This is a better approach than to go back over individual and unrelated decisions."

The change which Mrs Beckett's Government is now implementing is one of several inherited from the Conservative Government which will cut the value of the extra state pension based on earnings known as SERPS. Although a lot of people now opt out of paying into SERPS - putting the money instead into a personal or company pension - most people in work still have some entitlement to some SERPS based on contributions paid when they were not in an alternative pension scheme. At the moment, a woman who is widowed inherits all her late husband's SERPS. Most of the widows who benefit are already retired and the SERPS is added on to their own pension. But a woman whose husband dies from April 6 2000 will get only half his SERPS. Other changes will reduce the value of SERPS to about a quarter of its present level by 2050. So as the century progresses, new widows will get half of a much smaller amount. That is why, even in the first year, the average payment will be cut to almost a third, taking nearly £1100 off the annual pension paid to a new widow. The prospect is frightening many older people who thought they knew what to expect.

Bob Peck, an ex-accountant, is 79 and had a heart attack in 1992.

"I get around £2000 a year SERPS. If I go tomorrow my wife Doris, gets it all. If I hang on until April 6 next year she will get around half of that. It's a worry. I feel fit but none of us knows when we'll go. I don't see why the Government should withdraw the original SERPS, why they should cut it in half after a certain date. It wasn’t in the contract in the first place. If a private pension did something like that the Government would be down on it like a ton of bricks."

Bob has been unable to get much advice or explanation from the Department of Social Security. And the Government has confirmed that no details of the change were put into the department's leaflets until 1996, ten years after the law was changed. In a Parliamentary answer, the social security minister John Denham added

"The Benefits Agency leaflets always advise customers to check with their local Social Security office if they require more detail or up-to-date information about individual cases."

But Age Concern has evidence that personal callers to local offices were also given the wrong advice until very recently. Policy Officer Sally West is its pensions specialist

"A lot of people have contacted us and said they were not told about this change when they enquired about their future rights to a pension. Even if they have specifically asked what pension their wife will get if they die, they have been told she will get all their SERPS."

Age Concern says the Government should act to put this right.

"Labour did not support the change in 1986 and there is no reason why they should implement it now. We don't think it is reasonable to halve a pension depending on whether you're alive or dead on a certain day. At the very least, people who have planned on the basis of getting it all - and being told they would - should be compensated."

20 February 1999

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