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Government offers help but no re-think on change to women’s pension age

(Update) The government has refused to bow to pressure to rethink its plans to increase the state pension age for women.

Government offers help but no re-think on change to women’s pension age

(Update) The government has refused to bow to pressure to rethink its plans to increase the state pension age for women.

MPs from all parties have said the government's decision to bring forward the raising of women's state pension age to 65 by November 2018 and to 66 by April 2020 does not give older women enough time to prepare.

Pensions secretary Iain Duncan Smith told the House of Commons there would be 'transitional arrangements' to help women cope with the change but that the government would not compromise on the reform. Ministers have argued that delaying the increase would cost the taxpayer £10 billion.

The coalition originally agreed to follow the previous Labour government's policy of equalising the state pension age between men and women at 65 by 2020 and 66 in 2026. However, it sped up the timetable in the October spending review.

Duncan Smith said the coalition pledge had to be amended for 'legal reasons' but would not reveal to shadow pensions minister Rachel Reeves what those reasons were. The exchange occurred during a second reading of the pensions bill. 

Ros Altmann, director general of Saga and a former government adviser on pensions, said: ‘The current plans are unfair and may, indeed, be illegal in public law terms, since they clearly do not give women adequate notice of the large changes in pension age that they face’.

‘An alternative approach would be a win-win for everyone. By keeping the current equalisation timetable to 2020 and then moving more quickly to 66 by 2021, this would give everyone around ten years’ notice of the proposed increase in their state pension age,’ Altmann said. ‘We could then move to 66 ½ more quickly than planned, by say 2024 or 2025. This would recognise longer life expectancy, give people fair notice, honour the coalition agreement and save even more money on pensions than the current plans would achieve.’

A spokesperson for the department for work and pensions however said: ‘The bill will go forward without any changes to the timetable. If we delayed the move to 66, it would cost the taxpayer £10 billion and would be an unfair burden on the next generation’.

10 comments so far. Why not have your say?

Private Investor

Jun 20, 2011 at 13:08

Anyone who has paid NI contributions for 30 years has supposedly already paid for their pension, so to defer it at short notice is clearly unfair as is to claim that delaying the change would impose a 10bn cost on future generations . Yes, we know that their contributions have actually been used to pay for foreign wars and personal protection for Princess Beatrice and not kept in a pension fund, but that is not the workers' fault.. Presumably, although 10bn spent to honour pensions promises burdens future generations, the 10bn being splashed out for a fortnight of sport next year does not have this effect?

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Simple Simon

Jun 20, 2011 at 14:27

The big unfairness as I see it is the 'quantum jump' for women who are currently on the cusp at about 56. Having a birthday one month the wrong side of the change deadline costs you more than £10,000. I wouldn't have thought a linear scale was rocket science, rather than the very unfair 'annual steps' that are proposed.

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Anonymous 1 needed this 'off the record'

Jun 20, 2011 at 16:57

Do women want sex equality, or do they just want equality when it is in their favour?

Surely men are entitled to equality with women and no one is going to lower men's pension age so 2016 does not seem soon enough to me.

Also, I can not see why women who opted out of paying full National Insurance contributions should now receive pensions for which they have not paid.

Equality must be a two way thing, or be abandoned.

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Anonymous 2 needed this 'off the record'

Jun 20, 2011 at 18:27

well said they live longer so why complain when they have to retire at the same age as men.what ever date it starts they will complain. dont forget mens retirement age is going up as well .equality means equality or else dont complain when they dont get paid the same or a door is not held open for them or a seat is given up for them. how are the kids going to get work if the old ones wont give up or die in there jobs. we need a forced retirement age or the kids will see crime as the only payer .

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Clive B

Jun 20, 2011 at 19:00

Anon 2

Older workers staying in jobs longer is only one of the causes of lack of jobs (for the young). Others are increases in technology/automation (doing the same job with less people) and outsourcing jobs abroad.

I can't see why it should be that the economy that remains in the UK will grow at a fast enough rate to give jobs to all those that want them.

Choices seem to be

-continue as we're going. Welfare costs will go up due to increased number with no jobs (skipping over any civil unrest). Tax rises will be needed to pay for that.

-less automation and/or less outsourcing. May put more people in work, but cost of goods will increase (e.g no more cheap clothes, if we're going to insist they're made in the UK to give jobs to people here).

Either way, it's going to cost us. Only slightly tongue in cheek, I suggest - what about limiting the number of hours that can be worked to (say) 30 hours, no overtime - in order to spread the jobs available to more people ?

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George Hill

Jun 20, 2011 at 19:07

The Government has chosen an easy target here. They are unlikely to strike in any major, co-ordinated way. Why? Well the "threat" of having to work a year or two longer ISN'T as crucial to their retirement as some are saying. Consider... If anyone from this sector has to work longer, they will AT LEAST have a job! And (often) a fairly cushy one at that with a reasonable remuneration.

NOW - consider the unemployed, perhaps recently laid off from the private sector, who will HAVE to wait extra years for their pension - WITHOUT the bonus of a decent wage for an extra few years. The Local Government/Public employees will be FORCED to take a wage for a few extra years. Pehaps even aiding them in building up their pensions. Just a thought.

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Michael Wylie

Jun 20, 2011 at 21:43

My wife feels that the future budgetary planning that she had done and including the original delay to her state pension has now unrealistically been blown apart by this sudden additional change. Just who do they think they are ?

The vast majority of pension advisors think this is completely untenable.

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Jun 20, 2011 at 22:50

Yes, George but some of those women in that 56 year old age group are also unemployed from private sector, living off savings which were intended for retirement years, and without public sector retirement benefits to look forward to.

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George Hill

Jun 21, 2011 at 08:06

You are, of course, right dd. I hadn't forgotten them. The Tories are after the majority, though. As always, they ignore the many casualties. I think they've calculated how many workers will seriously object to their spiteful plans and decided that the "employed" public sector will accept the changes without too much clamour.

I daresay you've noticed the new arrngements don't affect THEMSELVES - and I include politicians of any "colour" here. Nothing new here then...

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Jun 21, 2011 at 09:10

I agree about "easy target". I think of it as (one of the) the price(s) my family has to pay to help the country's economy. I don't mind that we do our share and I accept that the state pension age needs to be raised and equalised etc. However, I would like to see a cap on public sector pensions. Imagine the savings from that.

As for politician's immunity, maybe they have come more into line on expenses but I am not so sure about pensions and the schools their children attend. (As you say, all colours, though on that score I find the hypocrisy of Labour far worse than any paid for privilege of the Conservatives).


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