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Pension changes – have women had enough warning?

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?

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Anyone in their mid to late fifties deserves to have the pension that has been theirs for so much of their working life. They have paid the contributions demanded from them for over thirty years. To suddenly change the ground rules doesn’t seem right. The government should look more sympathetically at a better age related sliding scale, perhaps giving women workers over forty five an opportunity to get a pension at sixty: with a raised contribution, greater for the under fifties and lessening as the age increases. Those between twenty and forty five have time to prepare for the age increase. They should have the right to buy an earlier pension if they choose to do so. For someone on a large salary, the retirement pension is just the icing on the cake, but it really matters to poorer households and it will be these people who will be punished most…as usual.

evie says:
22 June 2011

I am 59, and some years ago had to get used to the idea that I would not retire at 60 – I have in fact another 2 years to go. The objection now being raised refers to women born (I think) between 1954 and 1955, who have already had their age 60 retirement moved back once, and are now faced with another change so that instead of retiring at 64 or 65, they have to wait until 66.
While I have a certain sympathy, I do wonder how much preparation is needed for such a change? Most women I know in that age group have simply shrugged their shoulders, had a bit of a grumble, and carried on as normal. Another two years to pay into a personal pension will make next to no difference to the amount actually drawn in due course, unless you are looking at multi-thousand pound contributions. And if a woman is working now at age 56-ish, why does she need to change anything to continue working a bit longer?
To say that we have paid for our pensions is an illusion; we who are working are paying for today’s pesnions, and our children will pay for ours. Unfortunately there will soon be more pensioners than workers, unless the state pension age is pushed back at regular intervals, in line with life expectancy increases.
And while it sounds good to say that younger people should pay in more, we mustn’t forget that those younger people are the ones with young families, struggling to pay big mortgages and balance childcare. Yes, I remember it well, and at that age I certainly had no money to spare for a future pension!

Rose says:
22 June 2011

I am furious at the increase in pension age – being 55 and having worked from 18 to 50, most of that at senior level and paying huge amounts in both NI and tax. I don’t have children so took no “natural” career breaks to bring up a family and I have never benefited from child benefit or tax credits (which, in my experience, seem to just supply more Wii’s and IPODs etc in children’s bedrooms!).
Having contributed huge amounts to the State, with almost nothing in return throughout my working life,, I found at age 50 that I was suddenly redundant (for the 5th time, as companies often make redundancies at year ends then recruit new people in in a new financial year!) but that this time I couldn’t even get interviews, let alone a job at the level I was before. I have therefore had to use up all the accessible savings I could get my hands on just to live (not being eligible for benefits due to my partner earning, though my earnings were way higher than his and we are not even married). We had to “downsize” our property a few years ago and I am now having to sell all the possessions I’ve built up over 30 years, and many than we jointly own, just to buy food and pay our essential bills. We are also having to sell at boot sales almost every “weekend” (hah, what weekend!) and have no leisure time at all due to every minute being focussed on trying to bring in enough money to keep a roof over our heads. I was pushed into a craft self employment business by the Job Centre so that they could get me off their books (and so I wouldn’t be elgible for JSA if the business didn’t do well, which it hasn’t in the recession, and was never likely to provide more than top-up income anyway).
To say I am bitter about having to wait for my State Pension until I’m 66 is an understatement. I have gone from thinking I would be someone who, having earned well all her life and “done the right things”, would be retiring early in my 50’s, to someone who has trouble living day to day in her mid-50’s and for whom life now has very little enjoyment due to continual money worries. I am used to supporting myself financially but will now have to ask for “help” in order to, hopefully, avoid us losing our home (which is mortgaged).
If I’d known what I know now, I would have had children and not bothered to strive for a well-earning career – I am no better off than my mother was at my age (she worked only part time in low paid jobs all her life) and the only people who seem to receive financial assistance from the State now are those who have children. No tax credits for those of us who don’t, unless we don’t have partners, or they earn only a pittance.
What message does all this give to my niece and friends’ daughters who saw me with a so-called “successful” career then a speedy financial decline in the last 5 years? – don’t bother studying and working long hours to climb the career ladder – there’s far more money in becoming a “baby factory” and getting all the State handouts and tax credits that are available.
I just see that my “career” was a total waste of 37 years of my life and am hoping legal euthanasia will be in place by the time I decide that I’ve finally had enough! And I’m not a one-off case. I’ve seen other 50-something female friends go through this and more will no doubt follow as they’re still being “thrown on the scrap heap” at 50 despite the so-called anti-ageism legislation!

margaret says:
23 June 2011

NO this is not sufficient notice. When they started work the retirement age was 60 then this was increased to 65 by 2020. Now this has changed again to 2018 and 66 by 2020. A ten year planning horizon is not enough, you need to be able to plan in your 40’s at the latest.

I am married with two children however i worked full time until my early fifties when i planned to retire ( no tax credits or subsidies please note). As a family we saved hard from being aged 30 to 50 and had sufficient capital to top up small private pensions taken at 55. this was based on me getting state pension at 60 and my husband at 65.

I did retire in my early 50’s but will have to wait for my pension to start when i am 61y 2 m, my husband just manages to retire at 65 however if these dates had been put back further this would have had serious consequences.

i agree the age needs to rise and probably before 2026 but as women have had such a bad deal on pensions to date then maybe leave the women’s to be 65 at 2020 and then rise to 66 by 2022.

If all these women are blocking jobs then young people are unable to earn a living. I retired in part so that i was not blocking a job when i could manage if I retired ( but not a life of luxury )

I wonder if someone has caught up with my wife? She started her Basic State Pension in January 2009. To cut a long story short, I got my recent legislated increase in April 2010, but my wife dd not, even though we had full notification in February and late March of what the new Pension Payment would be. I now get £80.10 per week but she still gets the £84.81 from the last increase, not the £88.54 per week, as stated in Page 4 of both letters addressed to me. I have complained on he behalf but am still waiting for sparks to start flying!
To clarify, years ago, when we wed, we moved to Zimbabwe, where I’d been for the past few years and returned in 2009 in Retirement. Luckilly, we had kept up with payments to DWP, at values as advised by them to be assured of our Pension.

ex teacher says:
3 August 2011

Brianzim – your wife needs to contact The Pension Service – it may be that her pension is ‘frozen’ rated as she lived in Zimbabwe where pensions are not uprated. If the International Pension Service at Benton Newcastle u Tyne does not know she permanently lives in the UK this could be the reason that she hasn’t had the uprating this year.