MPs Urge Government to Reconsider Increase in Women’s Pension Age
There is concern amongst some MPs that the reforms to pensions, which will see the state pension age of women brought into line with men, will have a negative impact on those affected. They have called on the government to bring in a transitional package for those women who have had their pension age suddenly moved back.
The government introduced changes to the state pension age in 2010 as part of a process that will eventually see men and women qualifying for their state pension at the same age. The point at which women qualify is moving back gradually, depending on their date of birth. However, this process was speeded up recently so that the implementation would be complete by this April.
The Department for Work and Pensions (DWP) stated that this would enable 400,000 more people to get to the age they qualify for a pension, including those women that are affected by the equalisation reforms. However, as with any system of changes, there will be both winners and losers.
The Impact of Reforms
A report from the DWP at the start of 2016 highlights that, in the first 15 years of the changes, 75% of women and 70% of men will make notional gains from the reforms. These gains, though, will diminish over time, so that fewer people stand to be better off. Only about 45% of people will have a greater income by the time we reach 2060, which will amount to around £13 a week.
For those coming up to state pension age, financial advisers will need to examine the impact that these reforms could have on their retirement income. Improved software for financial advisers, such as that available at http://www.intelliflo.com/, can enable advisers to assess a customer’s long-term financial situation. This can help to provide them with peace of mind and an understanding of how much they will have to spend.
The system of reform has been designed to try to make state pensions clearer, as opposed to the complex process that previously existed. The report from the DWP states that equal pension ages for men and women has been brought forward by at least a decade due to the acceleration of the reforms. However, there are still concerns that the evidence supplied is contradictory and confusing.