Women to beat pensions trap: 500,000 won't have to wait as long as they feared to retire



Hundreds of thousands of women hit by controversial changes to the state pension system will be thrown a lifeline.



After a storm of protest ministers have acknowledged that the women affected, some of whom are in line to work for an extra two years, should be given a better deal.



Under one dramatic option being considered by David Cameron, their wait to collect their pension would be cut to a year.

Lifeline: Women will get a much better pension deal after ministers acknowledged their plight

Pensions minister Steve Webb said yesterday: ‘The crucial thing for us is fairness.’

At present, a woman can start receiving her state pension at the age of 60 years and seven months. A man must wait until he is 65.

Under the changes, the age will be 65 for both men and women in November 2018, rising to 66 by April 2020.

This means that around 2.6million women will have to wait longer before their pension payments start.



High-level talks: (clockwise from top) David Cameron, Nick Clegg, Danny Alexander and George Osborne all met recently to discuss women's pensions



Of the total, around 500,000 will have to wait more than a year, and the worst-hit 33,000 will have to wait two years.

MPs on all sides have been deluged with complaints from women, some of whom could lose up to £15,000.



The ‘Quad’ of four senior ministers – David Cameron, George Osborne, Nick Clegg and Danny Alexander – who run the Coalition met last week to thrash out the adjustments, with an announcement expected within weeks.



Mr Clegg and Mr Alexander are understood to be pushing for the women affected not to have to wait longer than a year before collecting their pensions, but sources involved in the discussions said the cap is more likely to be set at between 15 and 18 months.



RIGHTMINDS

KIRSTY WALKER: Today, the Daily Mail has revealed that the Quad - David Cameron, George Osborne, Nick Clegg and Danny Alexander – met last week to thrash out plans to soften the blow. The most dramatic idea being considered is to make sure that no woman waits more than one year before collecting her state pension. But affordability fears mean that the ministers are more likely to settle on a cap of between 15 and 18 months. The message of this week’s Liberal Democrat conference has been one of ‘fairness’. If the coalition is serious about this, then it must do the right thing for these hundreds of thousands of women. Politically, Mr Cameron and co. would be very foolish to ignore their plight. Read more here



While ministers recognise the need to soften the blow for the affected women, the Treasury is concerned about the cost implications.



The Daily Mail has repeatedly highlighted how women in their late 50s would be affected more than any other group by cost-saving increases in the pension age.



The worst hit are 33,000 women born between March 5 and April 5, 1954, who will have to wait an extra two years before they can receive their state pension, losing out on up to £15,000.



A further 300,000 born between December 6, 1953 and October 5, 1954 would have to see an extra 18 months pass before they are entitled to the payments.

Age concern: Pensions minister Steve Webb wants a fairer pensions deal for women

Mr Webb said there was a range of ways the Government could help women worst hit by changes to the pension system.



He said: ‘We’ll make sure that the state pension they do get is calculated in a fairer way. At the moment, pensions are often bad news for women and I’m determined as the minister to change that.



‘There’s a range of things that you can do, whether it’s about dates or about other bits of the system, that would ease the financial pressure for those most affected.



‘I won’t pre-empt what we’ll say to Parliament in some weeks’ time but the crucial thing for us is fairness.’



Following an intense campaign by MPs and age campaigners, Work and Pensions Secretary Iain Duncan Smith confirmed in June that ‘transitional arrangements’ would be made to help those worst affected.



In recent weeks, ministers have signalled that pension age increases for both men and women after 2020 could be accelerated slightly to pay for easing the burden on women in their late 50s now.



Jenny Willott, who co-chairs a Lib Dem backbench committee on work and pensions, said: ‘In an ideal world I would want to see no one retiring any more than a year later than they currently expect to. I realise that is expensive.’



Ros Altmann, director general of Saga, said: ‘I sincerely hope this heralds amendments to the Pensions Bill that would grant a reprieve to those women already in their late fifties who are currently threatened with up to a two year rise in their pension age, at very short notice.



‘The current proposals have caused huge distress and anger among those affected.



‘Many of these women are already retired – with only a few years left to pension age they have made irreversible decisions due to being ill or needing to care for others – and their finances are now in disarray.’



Shadow pensions minister Rachel Reeves, who has led the campaign against the changes to women’s pensions, said that women were still being ‘left in the dark’.



She said: ‘Half a million women are going to wait more than a year for their state pensions if these changes go through in less than a month’s time.