Pension changes 'little comfort'

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Indy Politics

The Government announced changes to the planned increase in the state pension age today, saying that tens of thousands of women would benefit at a cost of more than £1 billion.

The Department for Work and Pensions said a plan to raise the state pension age to 66 in 2020 would be delayed by six months from April 2020 to October 2020.

Around 245,000 women and 240,000 men would benefit, including 33,000 women who would have experienced a two-year rise in their state pension age, said the government.

Unions said the move gave "precious little comfort" to women, while an industry expert said the pension plans of tens of thousands of women would be "thrown into disarray".

The Pensions Bill going through Parliament would be amended from the current timetable to cap the increased wait to a maximum of 18 months, costing the Government £1.1 billion.

Under the Bill, the state pension age for women would reach 65 by November 2018 and rise to 66 for men and women by April 2020.

Work and Pensions Secretary Iain Duncan Smith said: "We have listened to the concerns of those women most affected by the proposed rise in state pension age to 66 and so we will cap the increase to a maximum of 18 months.

"We have always made clear that we would manage any change fairly and ensure any transition is as smooth as possible."

Pensions minister Steve Webb said: "We want to end the uncertainty for women waiting to learn what their state pension age is and we will be communicating with those affected so that they can properly plan for their future."

Prime Minister David Cameron's official spokesman said that the changes were intended to make the transition to the new system "as smooth and fair as possible".

"This means that women who face a two-year increase in state pension age will have their wait reduced to a maximum of 18 months," he said.

"The policy of increasing retirement age and equalising retirement age remains, but we have acknowledged the fact that there were some transitional issues with that change and we have been looking for some time at how to deal with those.

"We are acknowledging that if we make these changes there are going to be different effects on different people depending on how old they are."

Shadow Work and Pensions Secretary Liam Byrne said: "This is a humiliating climb-down for David Cameron, who has ordered his ministers to rush out an 11th-hour change to his Pensions Bill which faced a storm in Parliament next week.

"Today's announcement is just a sticking-plaster, and hundreds of thousands of women will still have to work longer and lose thousands without enough time to prepare."

TUC general secretary Brendan Barber said: "This concession means the Government has now accepted that they got the increase in the state pension age for women wrong, but hundreds of thousands of women will still lose out and have every right to be angry at the Government."

Naomi Cooke of the GMB said: "Taking the edge off the Government's state pension reforms is precious little comfort to the millions of women whose retirement futures are being blighted by the coalition's cuts, which all have a disproportionate impact on women."

Michelle Mitchell, charity director of Age UK, said: "We would have liked the changes being made to have gone further. Having faced uncertainty twice already, these women must not be affected by any further changes to their state pension age again without sufficient notice."

Justin King, managing director of MFP Wealth Management, said: "These changes will affect tens of thousands of women, at just a few years' notice.

"For the government to have decided to move the goalposts so dramatically at this late stage will throw their pension plans into disarray."

The report stage and third reading of the Pensions Bill is scheduled for next Tuesday.