Over a million women will be £32 a week worse off as pension age is brought forward

old woman sad about pensions
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Over a million women will be £32 a week worse off as the pension age is brought forward.

The government announced that the State Pension age will rise from 67 to 68. For those born between 6 April 1970 and 5 April 1978, the pension age will increase between 67 years and one month and 68 years, depending on their date of birth.

The Institute for Fiscal Studies (IFS) found that the increase in the state pension age will leave many women out of pocket, but will save the government billions.

The IFS report shows that the government will save £4.2 billion a year under the new reforms, plus a further £900 million a year from the additional national insurance contributions from women who are having to work longer.

Speaking about the research, Jonathan Cribb, a senior IFS research economist and study co-author said, “The tax and benefit system is much more generous to those above the state pension age than those below it.”

“So while increasing the state pension age is a coherent response to the public finance challenge posed by rising longevity it does place a further pressure on household budgets.”

“The increased state pension age is boosting employment – and therefor earnings – of affected women, but this is only partially offsetting reduced incomes from state pensions and other benefits.”

“Since both rich and poor women are losing out by, on average, roughly similar amounts, the reform increases income poverty rates among households containing a woman who has reached age 60 but has not yet reached her state pension age.”

Over two million have already been affected by the pension reforms, which sped up the process of raising the pension age. Women Against State Pension Inequality (WASPI) group argue that these women, who were born in the 1950s, have had to unfairly rethink their retirement plans at short notice.

Shadow Pensions Secretary, Debbie Abrahams has also condemned the decision to increase the age, saying it was “anything but fair.”

She said, “Most pensioners will now spend their retirement battling a toxic cocktail of ill health, with men expected to drift into ill health at 63 – five years earlier than this proposed quickened state pension age of 68 – while women expect to see signs of ill health at 64.”

However, a Department for Work and Pensions spokesperson said, “The decision to equalise and increase the state pension age is both fair and sustainable for future generations and in line with continuing rises in life expectancy.”

“Women retiring today can still expect to receive the state pension for over 24.5 years on average – which is more than any generation before them and several years longer than men.”

“By 2030, more than three million women stand to gain an average of £550 extra per year as a result of the new state pension.”

About the author

Alison is the Digital Content Editor for WeAreTheCity. She has a BA Honours degree in Journalism and History from the University of Portsmouth. She has previously worked in the marketing sector and in a copywriting role. Alison’s other passions and hobbies include writing, blogging and travelling.
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