If you’re aged 57 you may not get your state pension until you’re 66 if the government’s plans go through.
Around half a million women will have to wait longer for their state pension if government proposals become law. The coalition government wants to speed up the raising of the state pension age for women and men to 66, but women will be the worst affected. These plans come despite the fact that it was in the coalition agreement that the government wouldn’t do this. Around 33,000 women born between March and April 1954 will be the worst affected as they’ll have to wait for a further two years to get their state pension.
What will the changes mean?
Women are already having to wait longer for their state pension; the state pension age started rising from 60 to 65 last April and was due to be phased in over 10 years. Now the coalition government is planning to bring in a second delay. It means that if you were due to take your state pension after 5th April 2016, you’ll be affected (and that means you’ll have been born on or after April 6th 1953).
• 500,000 women will have to wait for a year longer than had been the case under the existing timetable for raising the state pension age.
• 300,000 women will have to wait for 18 months than had been the case under the existing timetable for raising the state pension age.
• 33,000 women will have to wait two years longer than had been the case under the existing timetable for raising the state pension age. If you’re born between March 6th and April 5th 1954 you will fall into this group.
• The full basic state pension is currently worth around £5,000 a year so if you have to wait for another two years, you’ll lose out on £10,000 of pension – and you’ll have to pay National Insurance (if you continue to work) as well.
What can you do if you are affected by pensions changes?
What are the options for bridging the gap?
If you don’t have enough money saved to support yourself while you wait for the state pension to kick in you have several options (although none of them may be practical or appeal).
• Work until your state pension kicks in. Although the government has got rid of the default retirement age many older women work part-time once they reach their late 50s (official figures show that only 50% of women aged 50 or over are in full time work).
• Claim out of work benefits. If you lose your job you may be eligible for jobseeker’s allowance.
SAVVY TIP: Contribution-based JSA can only be claimed for six months. Here, the amount you receive isn’t affected by your savings or those of your husband/partner. You have to have paid enough NI to qualify for it.
• If you can’t work because you’re ill or disabled you may be entitled to employment and support allowance (ESA), but you have to undergo a medical assessment.
SAVVY TIP: If you’re assessed as being able to work if you receive support and you receive contributory based ESA (which relies on you having made enough National Insurance contributions) you would only receive the benefit for a year.
What you can do.
The Pensions Bill is due to be debated in the House of Commons in the middle of May so there’s still time for the government to change its mind.
• If you don’t agree with the planned changes, write to your MP. Many MPs have no idea how women will be affected or that these plans break a coalition agreement pledge.
• Sign one of the petitions. There are several online petitions that you can sign: www.unionstogether.org.uk Hands off our pensions or www.saga.co.uk both have them.
• Spread the word. Many women don’t realise they’ll be affected so if you have friends and family in their mid 50s, tell them how they could lose out. You can find information about the www.pensionsadvisoryservice.org.uk delay to your state pension on the Pensions Advisory Service website.