Posted on October 24th, 2010 | Categories - Pensions
Pension age increase will hit women the hardest.
The biggest losers from the rise in pension age will be women.
The rise in pension age outlined in this week’s Spending Review will affect women the most, according to pension specialists.
Under the new legislation the state pension age will rise to 66 by April 2020 – a faster and further change than the previous government had planned.
Rash Bhabra, head of corporate consulting at financial management firm Towers Watson, said: “The biggest losers are some of the women born around 1954. 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″.
However, Ian Naismith at Scottish Widows said: “Increases to state pension age are unavoidable as average life expectancy rises, and are preferable to cuts in the level of state pensions. They also send out an important message that the traditional retirement ages should no longer mark the end of our working lives”.
Others, such as Joanne Segars, chief executive of the National Association of Pension Funds (NAPF), said that women in their late 50s may have to review their retirement plans in light of the upcoming changes. However, she explained that the changes must be handled fairly and provide people with the time to plan and adapt for their financial futures.
She added that “the trade-off for a later retirement must be a better state pension, particularly as the UK’s is the worst in Europe. The NAPF is calling for a basic state pension of £8,000 a year from 2017”.