July 28 2014 Latest news:

The state pension landscape has changed several times in recent years. Ed Foss examines the facts and asks – is the latest reorganisation fair?

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The simple answer is “no” – the way state pension ages have been altered is not fair. Women have been hit comparatively harder. Meanwhile, those who thought they were planning carefully for changes in the age they could start to claim their state pension have seen the rules change more than once since it was first made clear retirement ages were going to be pushed upwards.

But, and it is a major but, the argument goes that this had to happen at some point for clear economic reasons – so one section of society had to take the pain. The section of society taking that pain will invariably be upset to say the very least, but if it wasn’t them, it would have been someone else. So what are the facts? Well, as things stand – and that is important to remember because there is nothing to say the parameters will not alter yet again – the moment of “equalisation”, when men and women first have the same retirement age of 65, will be November 2018.

This will entail a sliding scale of retirement ages for women up until 2018, a calculation which can be done online using the Pensions Advisory Service calculator.

It’s worth noting that the calculator is not up to date yet, because technically the age changes have not yet been passed into law. The sliding scale will see state pension ages altering by months at a time – for instance, an individual may find they now have a pensionable aged of 61 years and eight months. The 2018 date is two years sooner than previously planned. Following 2018, the pension age for both men and women will increase in tandem to 66 in 2020. Increases to 67 and 68 are also planned for 2036 and 2046 respectively, but these could well come forward.

Michelle Mitchell, Age UK’s charity director, said: “Plans to increase the state pension age quicker than planned is bad news for the millions of older people, particularly the very poorest, who are unable to work for longer.

“Women will be hard hit by this change of policy, seeing their state pension age rise by six years between 2010 and 2020 compared to just one year for men.

“The government is breaking the promise it made in the coalition agreement not to start increasing state pension age to 66 for women before 2020.

“The poorest will be hardest hit as they are generally more reliant on their state pension and have lower life expectancy.”

Further reform was needed, said Mrs Mitchell, to ensure a higher state pension and a simpler system.

Ros Altmann, Director General of Saga, said the proposals had “unfair and disproportionate consequences for a significant number of women” who were already past their mid fifties and had no time to make up for the lost pension income they have been expecting.

“About half a million women will be affected adversely.

“These women were told, some years ago, that their pension age would increase from 60 to around 63 or 64.

“They accepted this change without fuss and set about planning their finances in anticipation of receiving their state pensions later than previously expected.

“But the government has suddenly moved the goalposts on them.”

There was never going to be agreement about this issue, the speed at which it was implemented and which age groups should pay the –

literal – price. The hit had to come at some point, but the fairness debate will not go away for some time.

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