European ruling could upset pension age plan: Government hopes of equalising retirement at 65 are at risk, Rosie Waterhouse reports

THE Government's plans to equalise the state pension age at 65, forcing women to work for another five years, could be thrown into disarray by a test case in the European Court of Justice.

While ministers are keen to raise the state pension age for women from 60 to 65 to save pounds 4bn a year, the European Court may rule that the age at which occupational pensions must be paid should be equalised at 60.

It is not clear whether such a decision would prevent the Government raising the state pension age to 65 or whether different equalised age entitlements for state and occupational pensions could co-exist.

However, if the European court introduces occupational equality at 60, on the grounds that one sex should not be disadvantaged, this would provide ammunition to those who have lobbied for the state pension age to be reduced for men to 60. If the Government equalises at 65 it could lead to more test cases.

An oral hearing of the European case, involving the now collapsed company Coloroll, took place in January and a preliminary opinion from the Advocate General is expected later this month. The court's ruling, which usually follows the advocate's opinion, is not expected until July.

According to Ann Widdecombe, a social security minister with responsibility for pensions, the Government has not yet decided whether to await the outcome of the Coloroll case before announcing any decision on equalising the state pension age.

Equalising at 65 will be the biggest decision affecting women's lives in decades. Such an unpopular policy change is unlikely to be announced until after the local government elections next month.

Press speculation has heightened that the Government has decided to equalise at 65 but officially, press officers say the options of 60, 63 and a flexible age between 60 and 70 are still being considered. However, a Depart ment of Social Security spokesman admitted yesterday that 65 was the most likely age because of the savings that would be made and because most other European countries were raising their pension ages in order to defuse the 'demographic timebomb'.

Between 1991 and 2030, the population will increase from 56.1 million to 60.3 million. The number of pensioners will increase from 10.4 million to 15.5 million but the working population will fall slightly from 34.4 million to 33.7 million.

This means that if pension ages remain unchanged, the 'support ratio' of those working to those over state pension age will fall from 3.3 in 1991 to 2.2 in 2030. If the state pension age is equalised at 60, the ratio will fall from 3.3 to 1.8 and if equalised at 65 it will fall from 3.3 to 2.7.

The Government says it would cost the Treasury pounds 4bn extra a year if the pension age was equalised at 60. These figures are criticised as gross over-estimates by the TUC which, along with the Equal Opportunities Commission, objects to women being deprived of pension rights for five years.

Ironically, the European Court test case which could scupper part of its pensions policy has been financed by the UK government in order to clarify an earlier ruling, the Barber judgment, in May 1990. This held that occupational pensions were deferred pay and fell within the Treaty of Rome (section 119 which lays down the principle of equal pay for equal work) and so pensions should be equal between men and women. It left unclear the age at which pensions should be equalised.

It is uncertain if the ruling would be effective from the court's decision in 1990 or retrospective to the date of the Treaty of Rome in 1957 or the UK's Sex Discrimination Act in 1975.

A DSS spokesman said: 'After the Barber judgment many companies have made up their minds they are equalising at 65. Other companies have . . . postponed a decision to await the outcome of the Coloroll case.'

Leading article, page 17

Start your day with The Independent, sign up for daily news emails
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs General

Recruitment Genius: Marketing Data Specialist

£22000 - £25000 per annum: Recruitment Genius: They are the go-to company for ...

Recruitment Genius: Search Marketing Specialist - PPC / SEO

Negotiable: Recruitment Genius: This is an opportunity to join the UK's leadin...

Recruitment Genius: Sales Administrator

Negotiable: Recruitment Genius: This caravan dealership are currently recruiti...

Recruitment Genius: Invoicing Clerk

£14500 - £17500 per annum: Recruitment Genius: This company are contractors to...

Day In a Page

Greece debt crisis: What happened to democracy when it’s a case of 'Vote Yes or else'?

'The economic collapse has happened. What is at risk now is democracy...'

If it doesn’t work in Europe, how is it supposed to work in India or the Middle East, asks Robert Fisk
The science of swearing: What lies behind the use of four-letter words?

The science of swearing

What lies behind the use of four-letter words?
The Real Stories of Migrant Britain: Clive fled from Zimbabwe - now it won't have him back

The Real Stories of Migrant Britain

Clive fled from Zimbabwe - now it won’t have him back
Africa on the menu: Three foodie friends want to popularise dishes from the continent

Africa on the menu

Three foodie friends want to popularise dishes from the hot new continent
Donna Karan is stepping down after 30 years - so who will fill the DKNY creator's boots?

Who will fill Donna Karan's boots?

The designer is stepping down as Chief Designer of DKNY after 30 years. Alexander Fury looks back at the career of 'America's Chanel'
10 best statement lightbulbs

10 best statement lightbulbs

Dare to bare with some out-of-the-ordinary illumination
Wimbledon 2015: Heather Watson - 'I had Serena's poster on my wall – now I'm playing her'

Heather Watson: 'I had Serena's poster on my wall – now I'm playing her'

Briton pumped up for dream meeting with world No 1
Wimbledon 2015: Nick Bollettieri - It's time for big John Isner to produce the goods to go with his thumping serve

Nick Bollettieri's Wimbledon Files

It's time for big John Isner to produce the goods to go with his thumping serve
Dustin Brown: Who is the tennis player who knocked Rafael Nadal out of Wimbeldon 2015?

Dustin Brown

Who is the German player that knocked Nadal out of Wimbeldon 2015?
Ashes 2015: Damien Martyn - 'England are fired up again, just like in 2005...'

Damien Martyn: 'England are fired up again, just like in 2005...'

Australian veteran of that Ashes series, believes the hosts' may become unstoppable if they win the first Test
Tour de France 2015: Twins Simon and Adam Yates have a mountain to climb during Tour of duty

Twins have a mountain to climb during Tour of duty

Yates brothers will target the steepest sections in bid to win a stage in France
John Palmer: 'Goldfinger' of British crime was murdered, say police

Murder of the Brink’s-MAT mastermind

'Goldfinger' of British crime's life ended in a blaze of bullets, say police
Forget little green men - aliens will look like humans, says Cambridge University evolution expert

Forget little green men

Leading evolutionary biologist says aliens will look like humans
The Real Stories of Migrant Britain: An Algerian scientist adjusts to life working in a kebab shop

The Real Stories of Migrant Britain

An Algerian scientist struggles to adjust to her new life working in a Scottish kebab shop
Bodyworlds museum: Dr Gunther von Hagens has battled legal threats, Parkinson's disease, and the threat of bankruptcy

Dying dream of Doctor Death

Dr Gunther von Hagens has battled legal threats, Parkinson's disease, and the threat of bankruptcy