Pension reform 'too much, too soon'
Published 30/03/2011 | 00:12
More than a third of people retiring this year will be living off incomes that put them below the poverty line, research has indicated.
Around 35% of people who plan to give up work during 2011 will retire on less than £14,400, the minimum income that the Joseph Rowntree Foundation estimates a single person needs, according to insurer Prudential.
Meanwhile, charity Age UK warned that there was growing anger about Government plans to accelerate planned increases to the state pension age, which it said denied millions of people the chance to plan properly for their retirement.
The Prudential research found that women were significantly more likely to retire in poverty than men, with 40% of women expecting to have incomes of below £14,400 a year, compared with 30% of men.
One in five pensioners of both sexes expect to have less than £10,000 a year to live off during retirement, with women twice as likely to find themselves in this situation as men.
Age UK said it had been inundated with emails and letters from women who were furious that, having already revised their retirement plans once, they were now being forced to wait even longer before they could claim their state pension.
It estimates that the changes will affect five million people, cost the worst affected women up to £10,000 in lost pensions income and force even greater hardship on people who are reliant on the state pension, those from poorer backgrounds who have lower life expectancy and those who are too ill or disabled to work.
Focus groups carried out by Age UK found that despite understanding the need to increase the state pension age due to rising life expectancy, people were "universally shocked" by the speed at which it was being done. More worryingly, some women still mistakenly thought they would be able to start drawing their state pension at 60.
Michelle Mitchell, Age UK's charity director, said: "By breaking its promise on the state pension age, the Government is hurting millions of hard-working people who believed their retirement was just around the corner.
"MPs must wake up to the unfairness of these proposals and the level of anger simmering away in their constituencies. Given that life expectancy is increasing, the Government is right to look at reforming the pensions system. But this is too much, too soon."