In the news this morning it was revealed that more than one million women who are in their 60s are going to be worse off because of the government’s recently announced state pension changes.
Researchers at the Institute for Fiscal Studies (IFS) discovered that, on average, women who are aged between 60 and 62 will become poorer by around £32 a week as a result of the intended changes in state pension age.
The IFS also warned that as a result of the dramatic financial losses suffered by that age group over the course of a year, poverty rates among that group will also rise drastically.
In response to the intended changes to the state pension age, the government described their policy as “fair and sustainable”, especially in light of the steadily rising life expectancy.
Under the government’s plans to raise the State Pension age to 68 between 2037 and 2039, the state would save approximately £5.1 billion every year.
Who is affected by pension changes? “Both rich and poor women are losing out” says IFS
Despite the savings made by the state, the recouping of £5.1 billion a year is putting personal pressure on individuals, as highlighted by Jonathan Cribb, of the IFS:
“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,” he said.
“Since both rich and poor women are losing out by, on average, roughly similar amounts the reform increases income poverty rates among households containing a woman who has reached age 60 but has not yet reached her state pension age.”
A spokesman for the Department for Work and Pensions told the BBC: “The decision to equalise and increase the state pension age is both fair and sustainable for future generations and in line with continuing rises in life expectancy.
“Women retiring today can still expect to receive the state pension for over 24.5 years on average – which is more than any generation before them and several years longer than men.”