IDS not budging on retirement age shift

Monday, 20 June 2011 5:25 PM

By Alex Stevenson Follow @alex__stevenson

Plans to put back the retirement age for women sooner than expected are sparking disquiet on all sides of the Commons.

The government wants to put the retirement age back to 66 for both men and women. It plans to complete the process by 2020, but will increase the retirement age for women sooner.

Women born between April 6th 1953 and April 5th 1960 will be affected by both changes. Their retirement age will increase from 60 to 65 by 2018.

The issue is being debated in the Commons as the pensions bill receives its first scrutiny by MPs at second reading stage.

The Department for Work and Pensions (DWP) has said that delaying the move to 66 would cost taxpayers around £10 billion.

But 20 Liberal Democrat MPs have signed an early day motion calling for the accelerated pace of change to be reversed, raising the prospect of another split in the coalition over the issue.

Earlier work and pensions secretary Iain Duncan Smith acknowledged that there were "issues and problems" and pledged to look again at his department's proposals.

In the Commons he said that the bill being presented for debate did not include any plans to change from the equalisation in 2018 or raising the retirement age to 66 for both sexes two years later.

But Mr Duncan Smith added: "I'm quite happy to look at transitional arrangements."

Summing up, he said: "Responsible government is not always easy government.

"We will stay the course and I hope, I believe, we must try and secure our children's future. These tough decisions are enshrined in the bill."

Charity Age UK released research last week which showed that one in five women still expect they will receive a state pension when they reach 60.

"Many women who are facing an increase to their state pension age have been working in low paid jobs since they were 15 or 16," Michelle Mitchell of Age UK said.

"Some have had to stop working due to health problems, others were counting on retiring to carry out caring responsibilities.

"They have already had their state pension age changed once and this latest proposed change is one step too far by this government.

"Telling these women, at short notice, that they now have to wait up to another two years to collect their state pension is unfair."

TUC general secretary Brendan Barber pointed out that women born between December 1953 and October 1954 had only found out they would not be able to retire at 64 two years ago.

"If the bill stays in its current form, many thousands of women will now have to postpone their retirement for a further 18 months or more," he said.

"Accelerating at such rapid speed the changes planned to state pension age for these women is hugely unfair, and MPs should do the right thing today and force the government to change its plans."

The Treasury is thought to be the biggest obstacle for campaigners, however. Its bid to reduce the deficit has made officials determined to make the pensions system pay for itself, limiting Mr Duncan Smith's manoeuvrability as the bill works its way through parliament.

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• economy
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• equality
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• pensions
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• retirement