Women have been caught out by changes to the state pension age
The official state pension age for women is being pushed back in line with men, moving from 62 this year to reach 65 by November 2018 and 66 by 2020.
Many women born in the 1950s now have to wait years longer than previously thought to access benefits – and have been caught unaware by the changes as a result of poor communication by the Government.
Just two years before expecting to retire some women reported that they would actually have to wait another six years before reaching the official state pension age.
More could and should have been done between 1995 and 2009 to let people know about changes, the Work and Pensions Committee said in a report published today looking at the issue.
Those affected by failings should in fact be able to access their pension earlier but at a lower payout rate – so that it would not cost the state more but mean women don’t have to wait as long to reach retirement age.
For example, a woman born on January 6, 1955, set to reach state pension age on 6 January 2021 aged 66, could choose to take her state pension nine months earlier on 6 April 2020 and would receive £149.58 per week in 2016–17, a reduction of £6.07 from the full new state pension of £155.65.
If accepted by the Government the move could even be announced in the Budget tomorrow by Chancellor George Osborne.
Critics said the measure would strike a good compromise.
Tom McPhail, head of retirement policy, at Hargreaves Lansdown, said: “The clock is ticking, with more women passing their originally expected state pension age every day, so if the government is going to act, it should do so as quickly as possible.
“This would be an effective compromise, allowing those women who have been affected by the increase in state pension age the option to draw on their state pension at the time they originally expected, albeit at a reduced rate.
He added: “This could also pave the way for everyone to have a more flexible state retirement age in due course.
“There is no reason why the Chancellor could not announce in the Budget tomorrow plans to explore this option further.”