1 Million Elderly Women Affected by Pension Age Reform
Are you female and nearing retirement age? Best you listen up. Major reforms to the state pension age are said to be negatively affecting over 1 million women across the UK. Delays to state pensions have meant that over a million women in the UK are now faced with poverty. The average household income of women aged between 60 and 62 is now £32 a week lower. However, the savings made from pushing back the retirement age mean the state is now 5 billion a year better off than before.
The Future of Pensions
Since 2010, the women’s state pension age has been steadily rising. The aim of the government is to have men and women’s state pension ages matched by 2018. There is also a move to increase the pension age for both sexes to 66. In the opinion of the government, the increases in pension age fairly match the continuing rise of life expectancy. In contrast, Waspi (Women Against State Pension Age Inequality) strongly disagree with the move.
They claim that raising the pension age for women was done “without adequately considering the full impact of these changes on the women affected”. Unfortunately, the change does affect a lot of women. These are not just figures, but instead, women who will now have to work longer before they retire. Many women continue to work past retirement age, in the effort to save as much as possible, by receiving an income as well as their pension. However, now the reforms mean that they have to rely solely on their salary, and receive no money from the state. This is putting the pressure on some households.
Women will now have to work longer before they receive their pension and go on to retire. Many women do continue to work past retirement age, in the effort to save as much as possible, by receiving an income as well as their pension. However, now the reforms mean that they have to rely solely on their salary, and receive no money from the state. This is putting the pressure on some households. Jonathan Cribb, of the IFS, said: “The increased state pension age is boosting employment – and therefore earnings – of affected women but this is only partially offsetting reduced incomes from state pensions and other benefits.”
Evidence of Poverty
Poverty rates measured after housing costs have increased from 15% of women aged between 60 and 62 to 21% of them. This suggests that the pension reforms have had an impact. There is supposedly “no evidence” to suggest women are experiencing material depravity. They can still afford the essential and important items. However, this could also be owing to the fact families rally round and offer help or money.
Poorer individuals have been hit harder as a result of this reform. Both rich and poor households are losing out on the same amount of money. As a result, poorer families have been hit harder by this reduction in income. “The falls in household incomes caused by the reform have pushed income poverty among 60- to 62-year-old women up sharply”. This is according to research by The Institute for Fiscal Studies (IFS). IFS research also indicated that though poverty rates were higher for those ages 60-62, when these individuals did finally receive their pension, there was no impact.
Only time can really tell the impact that these reforms are going to make. But, the government says 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.” Therefore hopefully minimising the effect of the initial losses.