A GENERATION BETRAYED: Why state pension reforms (designed by men) will mean misery for 2.6m women

Half a million women in their mid-50s face having to work up to two years longer under Government plans to speed up increases to the state pension age. The prospect has evoked fury among women, campaign groups and MPs. James Salmon considers how they could be protected . . .



WHAT’S HAPPENING?



As part of the biggest shake-up of the state pension for a generation, the pensionable age for both men and women is rising to 66 in April 2020.



Catherine Brickles: 'It is a huge disappointment'

Women were already seeing their pension age rise from 60 to 65 by then. But the controversial proposals to accelerate the changes will force half a million women to work more than a year longer than they had expected.

Previously, we had plenty of warning of the plans to raise the age from 65 to 66 between April 2024 and April 2026. In bringing the date forward the Coalition is breaking a promise not to raise the pension age for women to 66 before 2020.



Younger workers face the galling prospect of working into their 70s as the Government wants to link the pension age to life expectancy. This makes it almost inevitable the pension age will rise for both men and women to 68 sooner than 2046, as currently planned.

Campaign groups and MPs have revolted against the changes, saying they place an unfair burden on a small group of women, who will have little time to prepare. More than 180 MPs have signed a motion against the plans, including 26 Coalition MPs.



Rachel Reeves, Labour’s Shadow Pensions Minister, says: ‘It is simply wrong to punish women by moving the goalposts at this late stage. I’ve always agreed the state pension age needs to rise as people live longer, but these proposals unfairly hit women. It’s not too late for David Cameron to think again.’



On Monday, during a debate on the Pensions Bill, the Government insisted it would not back down, but said it may offer help to those women worst affected.



WHO WILL IT AFFECT?



Those who will be harmed most are women in their mid to late-50s who will have little time to change their plans.

Some 2.6 million women will have to wait longer than they expected for their state pension. Half a million born between September 6, 1953, and April 5, 1955, will have to work a year or more longer.

Of these, 300,000 born between December 6, 1953, and October 5, 1954, will see their pension age increase by 18 months or more.

An unlucky group of 33,000 women born between March 6 and April 5, 1954, will have to work two years longer. They will miss out on £10,624 in state pension, based on its current value of £102.15 a week and will have to wait longer for state pension top-ups, such as the state earnings related pension.



Pension credits will also be delayed, meaning women on low incomes who qualify for them could miss out.

WHY CHANGE IS NEEDED



As we all live longer, the state pension is costing more. Latest figures show it cost £68billion in 2009/10, up from £53billion less than a decade ago.

The Government says speeding up the reforms will save the taxpayer £30billion by 2025 at a time when the UK is struggling with a massive spending deficit. It argues that abandoning its plans would create ‘an unfair burden on the next generation’.



Delaying the increase to 66 to 2022, as suggested by Labour, would cost the taxpayer £10billion, the Government says.



The pension age was set at 60 for women and 65 for men when it was introduced in 1948. The logic behind this was that women were typically younger than their husbands and often didn’t have their own pension.

Since then women’s average life expectancy at 60 has increased by per cent, from 18.3 years in 1940 to 28.9 years in 2011. One in nine female pensioners is now expected to become a centenarian. These women will get their pension for 40 years, nearly half of their adult life.



BEARING THE BRUNT



Campaigners argue the changes discriminate against a group of women who are being asked to work longer at such short notice.



If the changes go ahead, the 33,000 women who face a two-year delay in their pension age will have only had six years to prepare. Laith Khalaf, from financial adviser Hargreaves Lansdown, says: ‘Many of these women will find it hard to make good this shortfall in so little time.’



Meanwhile, even the men worst affected by the changes are getting seven years’ notice of a one-year rise.’



To make matters worse, many women will have to cope with this burden on their own. Four in ten women facing delays are single and have no husband’s pension to rely on. Furthermore, just under 40 pc also have no private pension.

Dr Ros Altmann, a pensions campaigner and director general of over-50s financial group Saga, says: ‘These women are being asked to shoulder an unfair burden and have insufficient time to make alternative plans to replace the state pension they will lose.’ Separate research by charity Age UK suggests women are ill-prepared for the changes. One in five aged between 50 and 53 is still expecting to receive a state pension at 60.



Michelle Mitchell, charity director at Age UK, says: ‘Many women facing an increase to their pension age have been working in low-paid jobs since they were 15, some have had to stop working due to health problems, others were counting on retiring to fulfil caring duties. Telling them at short notice to wait up to another two years to get a state pension is unfair.’



WHAT ARE THE ALTERNATIVES?



On Monday the Government ruled out returning to the previous timetable as it would cost the taxpayer £10billion.

But it appeared to offer a lifeline to the worst affected women, by pledging to discuss ‘transitional arrangements’ to soften the blow.



There was no indication, though what these may be. They could include:

n Accelerating the increase beyond age 66 faster than planned. This would involve returning to the previous timetable until 2020 and then increasing the state pension age to 66 by April 2021 and to 67 by April 2025.



Saga says this is its favoured option as it would give people ten years’ notice for a one year change and 14 years’ notice of a two-year change.



Men and women will also be treated the same, it argues. The state pension age would reach 66 and three months by April 2022, 66 and six months by April 2023, 66 and nine months by April 2024 and 67 by April 2025 for both men and women.

This would save a further £5 billion on top of the existing proposals;

n Keep the slower increase in state pension age until 2020, then accelerate the rise to 66 by April 2021 instead of 2026. This would cost an estimated £7billion;

n Limit pension age increases to no more than one year for everyone. This would cost £4billion; or

n Provide pension credit to women affected by the changes. To protect women on low incomes, the Government could make means-tested pension credit available to people in line with the slower women’s pension age timetable.



This tops up weekly income to £137.35 for single pensioners. This would cost £800million.

P.S. MPS ARE STALLING ON REFORM OF THEIR OWN PENSIONS

Meanwhile, MPs are stalling over plans to cut their own supercharged final salary pensions.



They can build a £24,000-a-year pension in just 15 years, based on their £65,738 salary. A worker in the private sector would have to save £700,000 to get the same income at age 65.



When in opposition the Tories and Liberals promised to ditch MP’s final salary pension schemes for new MPs and replace them with a scheme linked to the stockmarket.

But more than a year after taking power, steps on the road to reform have yet to be taken.



Rules introduced after the expenses scandal handed responsibility for setting MPs’ pension and pay to the Independent Parliamentary Standards Authority.



Last month Sir George Young, the Leader of the House of Commons, ceded control of pay.



But still no decision has been taken over when pensions will be handed over to the new body.

'IT IS A HUGE DISAPPOINTMENT'



Catherine Brickles, a part-time NHS secretary from Preston, Lancs, says she feels 'betrayed' by the change in her pension age.



Born in May 1954, Catherine has been married to her second husband, John, for 12 years, has a 28-year-old son, and two step-grandchildren who live in the U.S.



She gave up full-time work to care for her son and also took responsibility for looking after her parents. She has two small occupational pensions from former jobs at BT and a local council.



'I just could not believe that they had moved the goalposts twice. I was thinking my state pension would kick in at 64, but now it will be another couple of years. It is a huge disappointment.'

Carole Howat: 'I have thought about going back to full-time work, but that would be letting my family down.'

'I HAVE BEEN HIT TWICE'



Carole Howat , who was 57 last month, says: ‘I was born in 1954, and while I have spent many years wishing I was younger, this is one occasion when I wish I’d been born at least 12 months earlier.’



Carole, who took early retirement from her job as a primary school teacher to help care for her grandchildren, lives in Huntingdon, Cambs, with her partner Richard,

65, a photographer.



Her son, James, is in the Royal Navy, while his wife, Sonia, is going back to work, also in the Navy, next March. Carole wants to help the couple look after their nine-month-old daughter, Jasmin. She has already done a stint of part-time work in order to help her daughter, Emma, care for her child Ella, who is now almost six.



Carole says: ‘I now have to wait 22 months longer for my pension than I did a few months ago. It is a lot of time and a lot of money.



‘I have been hit twice. When I first learned about it, I just howled. I have thought about going back to full-time work, but that would be letting my family down.’

Cathy Hurley, pictured with her husband Graham: 'This has added another year and nine months to my pension age'

RETIREMENT PLANS HIT



Cathhy Hurley’s 57th birthday was overshadowed by worries about changes to her pension.



She lives in Leominster, Herefordshire, with Graham, 60, her husband of 37 years who works part-time for a local authority.



She says the change to her state pension age has wreaked havoc with their retirement plans.



‘We wanted to become old-age travellers in a camper van and see a bit of Europe. The prospect of having to carry on working has completely thrown all of that,’ says Mrs Hurley.

‘I was already going to have to wait till I was 63 and nine months for my state pension under previous plans. This has added another year and nine months to my pension age.’



Mrs Hurley, who works part-time as PA to the managing director of a local packaging company, says: ‘We are not on the breadline, but if we have to save in order to realise our dream, it could jeopardise things like holidays with our grandson, Alfie.’

