Working the donkey till it drops: Equalising pensions at 60 instead of 65 could save billions, say supporters. Nic Cicutti reports

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EQUALISING pension ages at 60 could cost the taxpayer only half as much as the Government's proposal to increase women's retirement age to 65.

Were men able to retire on a state pension at 60 instead of 65, as at present, the extra overall cost each year would be pounds 700m, according to research from the Trades Union Congress.

If, as the Government proposes instead, women are gradually forced to move towards retirement at 65, the increase in costs will be double that at pounds 1.4bn each year.

The Government argues that equalising pension ages at 65 will save taxpayers pounds 3.5bn each year at today's prices.

However, the report by independent actuary Bryn Davies suggests that overall costs, including benefits for those who are unemployed but cannot retire, will make this option much more expensive.

By contrast, earlier retirement ages would lead to young people taking over the jobs instead. Their taxes would help pay the pensions of those who have retired.

Mr Davies' report was prepared on behalf of the TUC, one of several organisations that launched a campaign this week to persuade the Government to scrap plans to raise female pension ages to 65.

A separate report prepared for the campaign by Hilary Salt, another actuary, suggests women who retire at 65 stand to lose up to pounds 15,000 in pension benefits at today's prices.

Many will not be able to replace that sum because they are unlikely to be working between the ages of 60 and 65.

Under the Government's proposals, likely to be included in the Queen's Speech this autumn, women will gradually begin retiring later and later over a 10-year period starting in 2010. The change will therefore affect everyone under the age of 45.

Among the groups coming together to oppose the proposals are the TUC, the Equal Opportunities Commission, the National Federation of Women's Institutes and the charity Help the Aged.

Activities planned by the new coalition include a lobby of Parliament later this year, together with briefings of individual MPs on all sides of the House of Commons.

Brenda Hancock, director of social policy at the government-funded Equal Opportunities Commission, explained her organisation's support for the campaign.

'We have not found any evidence that women are keen on equalisation at 65. There is a lot more to indicate that they would prefer it to be at 60.'

She said a more sensible compromise might be to allow both men and women who wanted to work to a later age to do so, boosting their pension entitlements at the same time.

John Monks, TUC general secretary, said: 'The fact that we are working together shows the strength of opposition to the decision to equalise the state pension at 65.

'People simply do not want to have to work until they drop. But the real scandal is the thousands of pounds the Government will steal from both men and women.'

Mr Monks said 58 per cent of men were already not working past the age of 60, either because of redundancy or through choice. By denying them a pension until 65, the Government was creating additional hardship for some.

Joanne Segars, pensions officer at the TUC, rejected suggestions that the campaign was likely to fall on deaf government ears.

'We believe that between us we represent many millions of people. Once we start talking to MPs about what the issues involved are, we believe we can persuade many of them that our arguments are right.'

(Photograph omitted)

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