Despair and anger as change to retirement age penalises women

The Pensions Bill is going through parliament at the moment and will make some significant changes to our pension system. But there is one aspect of its proposals which has received little attention and needs to be highlighted immediately.

The Bill's proposal to accelerate the increase in the state pension age for women to 65 from 2016 and then to 66 for both men and women by 2020 has provoked despair and anger for hundreds of thousands of women. These changes are not only grossly unfair, but seem to have been proposed without thought on the impact it will have on a large swathe of women in this country.

Indeed, the proposals are directly breaking the assurances given in the Coalition Agreement which stated that the date at which the state pension age starts to rise to 66, "will not be sooner than 2016 for men and 2020 for women".

Yet, astonishingly, the Bill will start increasing women's pension age from 2016 and men's pension age will not start rising until 2018. So who exactly is affected? Those women born between 1953 and 1955 will bear the brunt. Half a million of them will have their pension age increased by more than one year, some by another two years. These are women who quietly accepted an increase in their pension age from 60 to around 63 or 64 in the 1995 Pensions Act, and have since been planning their finances in preparation for receiving their state pension at the new higher age.

The issue is not about the equalising of pension ages itself, which makes good sense, but rather the unfair way in which it is being done, without giving enough notice for them to prepare. Hitting the same women twice, increasing their pension age by up to an extra two years, with much shorter notice than is being given to men is patently unfair.

This latest decision, in direct contravention of the promises made only a few months ago by the new government, has proven to be the tipping point for many women. They have written to me asking for help. Indeed, with their pension age already close at hand, many of these women have already retired to care for relatives and now find that their finances, which they planned carefully, are in tatters.

It is important to not over-look that women are already at a pension disadvantage relative to men, with this generation of women earning less during their working lives; often being barred from joining private pension schemes when they started working; and many having their careers interrupted for child-raising.

This is not a debate about whether equalising pension ages is right but about the fairness of the way it is being implemented. Two women, born one year apart, will see a three-year difference in their pension age.No man is having his pension increased by over a year, while half a million women, whose pension age has already been increased by three or four years, are having their pension delayed by up to two extra years. Men are being given over eight years' notice of a one-year change in pension age, while women are being given just seven years' notice of a two-year change - how is this fair?

In the letters and e-mails I have received from women on this issue, they explain how they feel the rug has been pulled from under them. One woman said she feels as if the government has gone into her bank account and stolen thousands of pounds from her. She has no way of making up for the loss of over 10,000 of state pension that she was told she would receive just a few months ago.

There are alternatives to consider. The fairest would be to delay the increase in pension ages for everyone until 2020, when men and women's pension age will both be 65 and can then rise to 66. An alternative would be to adjust the timetable so that nobody's pension age goes up by more than one year within ten years of their pension age.

At the very least, the government must consider making special arrangements for the poorest and most vulnerable women, perhaps by leaving the Pension Credit age on the old timetable. If women cannot find work, they will run out of unemployment benefit after six months and then be stuck without their pension. They could be in deep trouble.

I really hope the government will think again on this and look to alter its timetable for pension age increases.

Ros Altmann is director general of Saga