Ministers delay state pension rise to 66 to help women

[dutchman]

Plans to raise the state pension age to 66 in 2020 will be delayed by six months to address concerns thousands of women will be unfairly disadvantaged.

Under coalition plans, the pension age was due to rise for women from 60 to 65 by 2018 then to 66 in 2020.

Critics said the move would mean some women would have to wait an extra two years to get their pensions.

Ministers have reacted by delaying the second rise in the pension age for men and women from April to October 2020.

The BBC's Political Correspondent Carole Walker said this was designed to address the concerns of a group of women born in the 1950s who were told, with little notice, that they might have had to wait up to two years to collect their pensions.

'Listened'

The change would cost the government about £1bn, she added.

Ministers announced plans last year to bring forward the date at which the pension age for men and women would be "equalised".

Under the plans, the pension age for women will rise from 60 to 65 by 2018, going up to 66 by 2020.

Women's groups said this would penalise about 330,000 women in their late 50s who would have to work for an extra two years before being able to collect their pensions and would have little time to prepare for the change.

Labour had called the plans "profoundly and arbitrarily unfair" while Lib Dems and Conservative MPs had also expressed concerns about what they would mean.

Work and Pensions Secretary Iain Duncan Smith said ministers acknowledged the existing plans were "on balance, unfair" in terms of their likely impact on this group of women.

"What we have done is to invest money to make sure that [the delay in getting a pension] is capped at a maximum of 18 months," he told the BBC.

"That will free up a lot of women, I hope, from their concerns and worries. We have listened to them and I hope that people believe we have acted well."

Cost

Mr Duncan Smith said the move - to be made to the current Pensions Bill - would be funded out of the £30bn in savings generated in the next Parliament by raising the state pension age and equalising it for men and women.

Lib Dem pensions minister Steve Webb said the government had "delivered on its promise" to consider the impact of the pension changes on those "most adversely affected".

"Raising state pension ages have to be done but we need to look at the individuals who are being affected and try and make sure the increases are not too sharp," he told Sky News.

"What we are doing here really is an issue of fairness. It is fair to ask people to work longer but there is an issue of how much you can ask them to work longer relatively late in their working lives."

As many as 250,000 men would also benefit from the delay, he added.

Joanne Segars, chief executive of the National Association of Pension Funds (NAPF), said: "This takes some of the sting out of what was a very raw deal for many women.

"This is a useful bit of leeway. People need time to prepare their finances for the transition into retirement, and there is now a clearer ceiling on what to expect.

"But a lot of women in their late 50s are still being told to wait another 18 months, and many will struggle to bridge the gap. The government could have done a bit more to give them extra notice."

TUC general secretary Brendan Barber said that putting up the state pension age would not create any extra jobs for older people.

[dutchman]

I'm one the men who (in theory at least) will also benefit from this change but I'm still far from happy.

The concession is miniscule in comparison with what has already been taken away by both Conservative and Labour governments.

The poorest 20% of men and women born after 1953 can no longer claim Pension Credit from the age of 60 and the considerable fringe benefits which go with it.

Many of these will be in poor health and so cannot continue working work but in most cases also cannot claim sickness benefit either due to changes in benefit rules.

Single women, divorcees, widows, etc are disproportionately disadvantaged compared with those who are still married.

Many of those who thought they had already made adequate private pension provision now find it is totally inadequate due to changes in market conditions, the fall in interest rates, etc.

The cut-off date is still arbitrary and based purely on cost rather what is the morally correct thing to do.

[rebbonk]

I am also unhappy with the government pension scheme.

I believed that I had a contract with the government, taken out when I started working. That contract basically said, "if you pay into the scheme, you can retire with a pension at this age." Successive governments have, I feel, robbed me by constantly moving the goal posts.

Oh yes, I was naive.

[dutchman]

I saw the the third reading and vote on the Pensions Bill in the House of Commons on BBC Parliament last night and was disgusted by how few MPs even bothered to turn up

The official vote of 287 votes to 242 in no way reflects the numbers who were present. The Prime Minister was there along with the Pensions Secretary and most government front bench spokesmen. There were a few Labour backbenchers scattered around including notably Glenda Jackson who drew attention to the plight of women who are currently in their late fifties.

Other than those the House was practically deserted.

[dutchman]

In October, the government said it could not afford to honour the pension commitment made by the previous government "as it would cost £10billion".

Yesterday, the same government offered public sector employees an extra $50billion.

That same £50billion could have been used not only to honour the commitment made by the previous government but also the goverment before that one!