You probably won’t have failed to notice the headlines about the government making some women wait an extra two years for their state pension. Have women been given enough warning about these changes?
Last night during the second reading of the Pensions Bill, the government came under fire for these proposals but they didn’t compromise.
The debate is fraught and extremely tricky, and I am sympathetic to aspects in both sides of the argument.
The case for extending women’s retirement age
On the one hand, the government is trying to treat men and women equally by saying that they work equally hard and should retire at the same time.
They are also trying to respond to the huge increase in life expectancy. If State Pension age had increased in line with increases in average life expectancy since 1926 retirement age would now need to be at least 75.
These extra years spent in retirement are being borne by the younger generation, who are already at the mercy of rising inflation, a squeezed job market and rising debt. During the debate last night, Ian Duncan Smith summarised:
‘In a country in which 11 million of us will live to be 100, we simply cannot go on paying the state pension at an age that was set early in the last century.’
And the case against
But on the other hand, the accelerated equalisation plan means 500,000 women born in 1953 and 1954 will have to wait more than a year longer to collect their state pension and 33,000 of those women will have to wait a full 24 months.
Age UK reported that of those providing information through their website nearly three out of ten (29%) already have caring responsibilities and more than four out of 10 (43%) have health problems.
Many feel that telling these women who are in their late 50s that they’ll have to work another two years is just out of order, and leaves them trying to balance health concerns with money concerns.
Have women had enough time to plan?
Opponents of the Pensions Bill proposals to increase women’s retirement age by up to two years want to push back the rise to 66 and for it not to start before 2020. But that would cost £10 billion, and it would be borne disproportionately by the next generation. They argue though, that seven years is not enough time to plan for the loss of up to two years’ pension.
Undoubtedly there will be further increases in the age when both men and women will be eligible for the state pension. Although I won’t be retiring for a long time yet, I’d like to think that I’d be given plenty of warning of any changes to my pension. How much notice do you think should be given by the government for increases in the state retirement age?
Are you baffled by state pensions or Sipps? Are you worried about being able save enough for your retirement? Whatever your pension questions, Which? experts will be on hand to answer them during our live Q&A on Friday 1 July. Sign up now to take part in this exclusive event for members, or log on at 12.30pm on the day to get involved.
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