Pensions: Government presses ahead with plans to raise women’s retirement age

21st June 2011

The Guardian reported that plans to change the age at which women can take a state pension would leave 500,000 women waiting more than an extra year before they can retire.

Liberal Democrat and Conservative MPs joined Labour members in arguing against the state pension age for women being equalised with men at 65 in 2018, then everyone moving to 66 by 2020.

MPs from all parties are concerned that half a million women born in 1953 and 1954 will have just seven years' notice that they will have to wait more than a year longer to collect their state pension with 33,000 of those having to wait up to two years.

The reason MPs are so concerned is because 40% of women aged 56 do not have any private pension savings. And at this age women's average pension is six times less than that of a man of the same age.

The Telegraph reports Duncan Smith as insisting – during the second reading of the Pension Bill – that the current timetable would not amended.

However, he conceded that he may be prepared to consider "transitional arrangements" designed to help those worst affected; such as higher welfare payments being offered to those women who are out of work but unable to claim their state pension because of their age.

Despite cross-party concerns the government won the vote on the first reading of the bill with a majority of 70.

The National Association of Pension Funds' chief executive Joanne Segars, the NAPF chief executive told the Telegraph it was disappointed the government had not  done more to 'iron out the unfairness' of the plans.

She said: "Telling someone in their late 50s that they'll have to work another two years is out of order, and leaves many struggling with the switch into retirement."

The head of Unison, Dave Prentis, is expected to address the issue at the union's annual conference in Manchester. He is expected to warn of a general strike over what amounts to a double whammy over women's pensions

The governement is fast-tracking the state pension changes at the same time as proposing changes to public sector pensions , the majority of which are collected by women.

Tom McPhail, head of pensions research at Hargreaves Lansdown said: "The fact that the coalition is willing to face down the heartfelt opposition to its pension plans both for women and for the public sector are an indication of the seriousness of the retirement saving crisis. "

"They probably also calculate that if they start to give ground on their reforms now, they could end up in full-scale retreat; better to stand firm and meet the opposition head on."

McPhail is urging pension saves to ask themselves five key questions

·         How much is being paid into my pension?

·         What income is that likely to buy me in retirement?

·         What age will I be able to afford to retire?

·         Where is my money invested?

·         How will I draw it out at retirement?

 

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