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MPs back early state pension for women

Work and pensions committee will recommend women hit by accelerated rises in the state pension age should be allowed to take their pension early.

 
MPs back early state pension for women

MPs on the House of Commons work and pensions committee (WPC) will recommend women affected by accelerated rises in the state pension age should be allowed to take their state pension early.

The WPC issued an interim report in January, which attacked the government over the ‘lack of clarity’ provided over state pension changes.

A final report to be issued by the committee will recommend a 'fiscally neutral' solution involving women taking early receipt of their state pension.

Conservative MP for South Thanet Craig Mackinlay told Citywire the recommendation would be before the Budget next week.

‘What we are looking at on the committee – and it will be published shortly – is the potential for an actuarially-based, fiscally neutral, early taking of state pension,’ he said.

‘It’s cost neutral. There would be a cash flow disadvantage to the Treasury, but at fairly low interest rates the government could borrow at the moment and would be getting it back later.’

Conservative MP for Salisbury John Glen, who sits on the committee, backed the idea during the most recent commons debate on the 'Waspi' issue.

'What I propose is that the group of pensioners in that early-50s cohort are given the option to take their pension earlier,’ he said at the time.

‘Their pension would be reduced, but it would be a relatively small amount for two or three years, and it should be cost-neutral to the government even taking into account the cost of the administrative changes involved.

State pension ages have risen sharply for some women, who now claim they have been left either having to work longer or struggling to make ends meet as they wait several extra years to collect their state pension. Campaigners have claimed the government did not publicise successive changes well enough.

The 1995 Pensions Act first set out women’s SPA rises from 60 to 65 to equalise with men’s. The Pensions Act 2007 raised the pension age for women and men from 65 to 68 between 2024 and 2046. The 2011 Pensions Act accelerated this timetable. Women’s SPA would hitting 65 by 2018 and both men and women would have an SPA of 66 by 2020. It meant some women would have to wait an extra two years to receive their state pension, later capped at 18 months at a cost of £1 billion.

The Women Against State Pension Inequality (Waspi) campaign called for 'fair transitional arrangements' for those affected. The topic has now been debated four times in parliament.

9 comments so far. Why not have your say?

martin smiler

Mar 11, 2016 at 11:16

Pensions i took out a Hambro life pension lump sum £1043 in may 1985 today that pension is worth £1916, less than 2% growth the rest taken in charges, there is not enough being done on this issue of charges/bad performance, how can the gov get people interested in Pensions when there are 1000's of policy's like these being sold

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Carol via mobile

Mar 11, 2016 at 13:01

I totally agree Martin! My pension forecast now is a pot smaller than the money I put in! Equitable Life..... Although both my adult children do have pensions, they also own property which is far less risky an investment than a pension!!

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Jim Waddington

Mar 11, 2016 at 20:34

It will be interesting to see exactly what reduced 'early-taken pension' will be on the table next week, but if it happens a good smack in the eye for Ros Altmann who has been singularly unhelpful to this disadvantaged group throughout this saga

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Gerald Watson

Mar 12, 2016 at 11:02

Totally agree with you Jim. She claimed the DWP had no pot of money to resolve this issue but a solution looks to have been found that is cost neutral. Poacher turned gamekeeper.

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Piston Broke

Mar 12, 2016 at 14:23

I can not understand where this money would come from ?

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Codger

Mar 13, 2016 at 09:10

It seems a good idea and over the long term could be cost neutral. But in the short term it could be horrendously expensive. If just a million women took £5000 pa, that would be £5billion pa on the deficit.

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andy

Mar 13, 2016 at 09:52

Fiscally neutral I assume means that they get less per week to cover the fact that they are getting it for longer.

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MoneyObserver

Mar 13, 2016 at 11:26

The government does have 'no pot of money' to solve the difficulty.

The solution proposed is self funding from the pensions of the group of women involved.

However it does entail some extra government spending now (to be borrowed), but repays itself over the lifetime of the actuarially reduced pensions.

The only extra money involved is the interest the government will pay on this extra borrowed money while it slowly reduces over the pension lifetimes.

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Jim Waddington

Mar 13, 2016 at 15:39

I think 'Money Observer' makes the key point - this currently disadvantaged group have paid in their contributions & done so on the understanding until v. recently that they would retire at 60 - to totally defer payment for up to 6 years is patently unfair and, as a transition arrangement, self funding from the pension contributions made by this group would seem sensible. What is not acceptable is that the Pensions Minister did not see and recommend this option earlier / previously instead of presiding over a situation where some women (1953 births) got some compensatory transition arrangement whilst the rest (1954-56) got nothing.

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