Women will be the biggest losers from the rise in the state pension age. The age at which women can collect the state pension was supposed to rise gradually from 60 to 65 by 2020, but under the Coalition's plans it will rise further and faster. The state pension age for women will reach 65 by December 2018 and 66 by April 2020, bringing it in line with men.
“The biggest losers are some of the women born around 1954,” said Rash Bhabra, head of corporate consulting at Towers Watson. “A woman born on 5 April 1953 will still be able to claim her state pension when she is just 62 years, 11 months and one day old. A woman born a year and a day later will have to wait until she is 66. The extra three years of missed state pension income could be worth more than £15,000.”
The hike in women’s pension age is “draconian” according to the former government adviser and director-general of Saga, Ros Altmann. “We all know something has to be done about pensions but it seems that women are bearing the brunt. The French are out on the streets but British women are expected to swallow a rise of six years in their pension age over a decade.”
Dr Altmann said that the current government policy of allowing employers to force their staff to leave at 65 was incompatible with the new higher state pension age: “We face the prospect of women and men having to leave their jobs at 65 on their employer’s whim and then having to live off unemployment benefit while they wait for the state pension to kick in, which itself is one of the worst paying in the developed world.”
The changes to the state pension could save the Exchequer up to £5bn a year and it now looks increasingly likely that the date of further rises in the state pension age to 67 and 68 – previously planned for 2036 and 2046 respectively – will also be brought forward.