Pension age rise 'to hit millions'
Published 04/11/2010 | 12:52
Nearly five million people will be hit by the Government's decision to raise the state pension age with the worst affected losing up to £13,500, figures have shown.
Chancellor George Osborne announced plans in the Comprehensive Spending Review to accelerate the increase of the age at which women can claim their state pension from 60 to 65, and to raise the age at which everyone can claim it to 66 by 2020 - six years earlier than previously planned.
The change means around 500,000 women will have to wait an extra two years before they can receive the state pension, while 4.4 million people will not be able to claim it for an additional year, according to Department for Work and Pensions (DWP) figures.
The basic state pension is currently £97.65 a week for a single person, meaning that those who qualify for the full handout could miss out on more than £5,000 a year.
In the worst case scenario, around 30,000 people will lose around £13,500 each as a result of the changes, the equivalent of up to 9% of the total state pension they are expected to receive during their retirement.
Those who stand to lose the most are men who would have received the pension credit to top up their state pension, with the benefit currently increasing their income to £132.60 a week.
But the DWP pointed out that the potential losses did not factor in the extra income someone was likely to receive as a result of being in work, or the extra benefits that people could earn or claim during the period.
The Government is raising the age at which people can claim their state pension to 66 between 2018 and 2020, bringing forward the previous government's plans to increase it between 2024 and 2026. The change will affect women born from April 6 1953 and men born from December 6 1953.
It is also accelerating the increase in the state pension age for women from 60 to 65, which will be the same as for men by November 2018. The changes will save £30.4 billion between 2016/17 and 2025/26, but pensioner groups have reacted angrily to the move.
Dr Ros Altmann, director-general of the Saga Group, said: "A rethink is essential. They penalise at least half a million women making them wait an extra two years for their state pension and even the Government itself admits they will not have time to prepare."