Comment: The state pension age rise is unfair

The acceleration of the increase in the state pension age will disproportionately hit those on lower incomes.

By Michelle Mitchell

The past few weeks have seen a raft of reforms outlined for state and occupational pensions. At a keynote speech at Age UK's conference two weeks ago, work and pensions secretary Iain Duncan Smith outlined his key principles for pension reform, with a focus on the next generation of pensioners and making it pay for current workers to save for retirement. The recent publication of the Hutton Report on public sector pensions is the beginning of significant future reforms to the pensions of millions of public sector workers, many of whom may have to work longer and contribute more. Most urgent, however, is the pensions bill currently working its way through parliament.

The bill, due to receive its report stage reading in the House of Lords on March 30th, will have a significant impact on nearly five million people currently in their mid-50s. If you were born between 1953 and 1960, you can expect a hike in your state pension age under the new proposals. 2.3 million men will see their state pension age rise by one year. 2.9 million women will be affected – both by the speeding up of the equalisation of men's and women's state pension age, and by the rise in the state pension age to 66. Of these women, 330,000 will have to wait eighteen months or longer to receive their state pensions than originally planned, while 33,000 women will face a full two-year wait.

Those hit by these proposed state pension age changes are also those least able to cope with such a dramatic shift in their expectations at such short notice. Those worst affected are being offered less than eight years' notice that they will have to work for up to two years more than they had planned. Age UK believes that the state pension age should not begin to increase to 66 before 2020, which would give those affected ten years' notice and allow more time to plan for a delayed retirement. This is already faster than the current timetable, which wouldn't begin the increase to 66 until 2024, but slower than the pensions bill proposals, which aim to begin the increase in 2018.

This acceleration of the increase in the state pension age will disproportionately hit those on lower incomes, who often have lower life expectancies and will lose a greater proportion of their retirements. Furthermore, women in their sixties particularly face the pressures of caring for grandchildren while children are in work, and for older parents with often significant care needs, making it extremely difficult for many to remain in work.

Furthermore, the rise in the state pension age to 66 explicitly contradicts the government's own programme in the coalition agreement, which promised not to begin to raise the qualifying age until at least 2016 for men and 2020 for women. Whilst Age UK fully accepts that the state pension age has to rise, to reflect the welcome increase in life expectancy overall, we believe the specific proposals in the pensions bill are too fast.

One of the women facing a two-year rise in her state pension age told us: "I was so mad when I found out I will have to work till I am 66. I wanted to have time with my husband and three-year-old granddaughter and do some voluntary work for the children's hospice. I feel badly let down. It's so unjust and unfair. They have let us believe all these years that we'd retire at 60. I have paid into the system for 37 years and then at 56 the goalposts have been moved."

We would urge politicians from all parties to consider the real impact this bill will have on nearly half a million people across the UK. Pension reform is necessary to better reflect our ageing population, but this particular change is not the answer.

Michelle Mitchell is the charity director at Age UK.

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