DR ROS ALTMANN
DIRECTOR-GENERAL, SAGA
PRESS RELEASE
February 1, 2011.
WOMEN’S STATE PENSION IMPLICATIONS EXPLAINED.
Dr Ros Altmann, a leading economist and Director-General of over-50s organisation Saga, says that the UK
“Handbags at dawn will be as nothing once the penny drops with hundreds of thousands of UK
“Across the country I’m hearing from women who are suffering that sudden sickening realisation that their destiny in retirement is not in their own hands – this is not about luxury retirement villas, this is about affording the basics. And they can do absolutely nothing about it.
“Proposals to increase the state pension age for women to 66 by 2020 seem to have unfair and disproportionate consequences for a significant number of women already past their mid-50s who have no time to make up for the lost pension income they have been expecting. (Video 2)
“Around 500,000 women already over 55 will see their pension age rising by more than one year – and that is on top of increases of three or four years that they were required to accept in the 1995 Pensions Act. They were assured by the new Government last year, in its Coalition Agreement, that women's pension age would not rise again before 2020 - but those assurances have been broken.
“As part of the measures to cut Government spending, the coalition announced that women's state pension age – which is already being increased from 60 - will start to rise even faster to reach age 66 by 2020.
“This means that between 2010 and 2020, women's pension age will increase by six years, while men's pension age will be raised by just one year. These new extra increases for women start from 2016, but for men the increase is just one year and only starts from 2018.
“These changes were not mentioned before the election and, indeed, the Coalition Agreement stated that women's state pension age would not rise further before 2020.
“Hundreds of thousands of women will be affected adversely. These women were told, some years ago, that their pension age would increase from 60 to around 63 or 64. They accepted this change without fuss and set about planning their finances in anticipation of receiving their state pensions later than previously expected. (Video 3)
“But the Government has suddenly moved the goalposts on them. From 2016 onwards, women’s pension age is being increased again. For some unlucky women, by up to two more years.
“By suddenly making them wait so much longer, they face a shortfall of more than £10,000 and they simply will not have time to make appropriate financial arrangements to offset those losses. (Video 4)
“The Government announced these plans unexpectedly. Its paper explaining this decision concedes that women will not have time to plan, but still asserts that the change is not disproportionate.
“Women are already at a pension disadvantage relative to men. This generation of women earned less during their working lives. They were often barred from joining private pension schemes when they started working. Many had to interrupt their careers for child-raising, giving them less chance to build up a pension outside the state system and receive less state pension as well. (Video 5)
“Others have already made careful plans for their retirement, some are seriously ill.
“These women have often already retired to look after older or younger relatives and most are not earning enough currently to be able to save the thousands of pounds necessary to replace the lost state pension. The decision is clearly discriminatory.
“Women accept the need to equalise pension ages, but the timetable proposed is unfair. The outrage is clearly demonstrated in the countless letters that we have received from our members.
“Saga’s survey of more than 12,000 men and women aged over 50 reveals that 74% said that even though the Government needs to raise money, the change in women's pension age as proposed is not the right way to proceed.
“The Government urges people to plan carefully for their retirement. Yet women who did exactly that have had the rug pulled from under them by the Government itself. Saga is calling for the Government to reconsider its plans.” (Video 6)
What could the Government do instead? – favoured option:
Delay the increase in women's pension age until 2020. Between 2010 and 2020, women's pension age is already set to increase from 60 to 65. By 2020, the pension age for men and women will be equalised at 65. Waiting until 2020 before starting to increase women's pension age still further will allow men’s and women's pension ages to rise in tandem to 66, perhaps by the end of 2020. This would allow more time to prepare, affect fewer people and not interfere with the existing timetable of pension age changes.
Further options:
At the very least, surely the Government must limit rises in women's pension age to ensure nobody suffers a rise of more than one year in pension age within ten years of their expected pension date.
In order to protect the most vulnerable women (and men) the Government could also leave Pension Credit eligibility at the current state pension age timetable, rather than increasing the age at which pension credit begins in line with rising women's state pension ages. This would at least ensure that the poorest will not be left to rely on just unemployment benefit.
In addition, the Government could consider exemptions for seriously-ill women (and men) and allow them to retain the currently planned pension ages until 2020.
It is also essential that the Government makes it clear to women exactly what is being proposed, as many still are unaware of the plans. Ros Altmann said: “The Government itself is still misleading women with its official website. (Video)
“Despite the announcement of these reforms the changes have not been accurately reflected on the Government's own state pension age calculator on the Directgov website. (http://pensions.direct.gov.uk/en/state-pension-age-calculator/home.asp),” said Ros Altmann.
“A small caveat under the calculator that signposts further information on the ‘proposed’ changes is simply not enough. The calculator should either be withdrawn or amended to reflect the new proposed dates – immediately.”
Ends
Further information:
Iain Macauley
07788 978800
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