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Source : Age UK
Published on 12 February 2014 12:01 AM
Eight out of ten older people (79%) oppose a proposed change to the state pensions system which will leave 30,000[i] women reaching state pension age between 2016-2020 out of pocket in retirement, according to new research by Age UK[ii].
The Pensions Bill, currently being debated in the House of Lords, is proposing a new single-tier state pension for people reaching state pension age on or after 6 April 2016.
Although changes to the pension system will be beneficial for many women across the country some will lose out. The new single tier pension will be an individual entitlement with no allowances for those who are married, bereaved or divorced – unlike the current system which allows people who are, or who have been, married or in a civil partnership, to use their partner’s record to receive a state pension or to increase the amount they receive on their own record. Although some transitional arrangements will be in place when the new pension comes in 2016[iii], they are still expected to leave tens of thousands of women, and some men, with a lower pension than expected.
Of those people surveyed for Age UK, well over half (57%) believe this change is unfair and that people should be able to claim on their partner’s contribution record if their own falls short of giving them a full state pension. One-fifth (22%) believe that people should rely on their own contributions but that the Government must give people enough notice of the changes so that they can properly plan for their future. Only around one in 10 (9%) agree with the change – believing it’s only fair that the state pension is based on the individual’s full National Insurance Contribution record and that it’s right that the change should be implemented quickly.
Age UK has revealed the findings to highlight its call for the Government to amend the current Pensions Bill and protect those approaching retirement.
Caroline Abrahams, Charity Director at Age UK, said: “The aim of this reform is to introduce a fairer state pension yet it cannot be fair to change the rules without giving people enough time to also change their retirement plans. Many of those affected will have made life choices and planned their retirement finances carefully with their partner only to find them in disarray if there is insufficient transitional protection in place.
“We are urging the Government to correct this injustice so tens of thousands of women can receive the pension they expected, giving them precious financial security in later life.”
Women tend to have lower state and private pension rights – around two out of five women aged 55-64 have no private pension wealth compared to around one in five men of the same age, and those women that do have private pensions tend to have much lower amounts[iv].
Age UK supports the principle of women building up their own pension rights but the organisation argues that people need enough time to adjust to any pension changes. Some women do not have a full National Insurance record because of years when it was difficult to work due to ill health or caring responsibilities. Or they may have worked for many years but in low-paid jobs or voluntary roles[v]. However as a couple, they may have planned their retirement income in the expectation that the woman will receive the married woman’s pension or a full basic pension if widowed. For those approaching state pension age it will often be too late to change these plans.
This view is further supported by Age UK’s new research which shows that three in five of those who expressed an opinion (58%) believe the Government should give over 10 years notice of such a significant change in policy, with two in five (38%) stating that the government should give more than 20 years notice.
For more information about the new single tier pension and how it could affect individuals who expect to receive a state pension based on their partner’s contributions please visit www.ageuk.org.uk or call Age UK Advice on 0800 169 65 65.
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For further information or a telephone briefing please contact the Age UK press office on 020 303 31444/31713.
For more information about derived rights and the Single tier pension please read the following Age UK policy briefing papers:
Information for individuals expecting to receive a state (PDF 260 KB)
What the new State Pension reforms mean for you
Latest news on the Pensions Bill 2013-2014:
The House of Lords Committee Stage has now ended (20 January) and report stage will start on 24 February.
Media contact: Helen Spinney/ Anne-Marie DoohanTelephone: 020 3033 1713/ 1444Out of hours: 07071 243 243
For media enquiries relating to Wales, Scotland and Northern Ireland please contact the appropriate national office: Age Scotland on 0131 668 8055, Age Cymru on 029 2043 1562 and Age NI on 028 9024 5729.
About Age UK: Age UK is the new force combining Age Concern and Help the Aged, dedicated to improving later life.
We provide free information, advice and support to over six million people; commercial products and services to well over one million customers; and research and campaign on the issues that matter to people in later life. Our work focuses on five key areas: money matters, health and well being, home and care, work and training and leisure and lifestyle. We work with our national partners, Age Scotland, Age Cymru and Age NI (together the Age UK Family), our local Age UK partners in England and local Age Concerns. We also work internationally for people in later life as a member of the DEC and with our sister charity Help Age International.
Age UK is a charitable company limited by guarantee and registered in England (registered charity number 1128267 and company number 6825798). Age Concern England and Help the Aged (both registered charities), and their trading and other associated companies merged on the 1st April 2009. Together they have formed the Age UK Group (“we”). Charitable services are offered through Age UK and commercial products are offered by the Charity’s trading companies, which donate their net profits to Age UK (the Charity).
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We have a number of experts available for comment, including:
Caroline joined Age UK in 2012.
A social scientist and barrister, Caroline has spent her career in the voluntary and public sectors, mostly on children and families’ issues. She has worked in a senior capacity at the children’s charity, Action For Children and at the Local Government Association. Caroline has also been a policy adviser to Ministers and Shadow Ministers, and a senior civil servant. A former chair of the End Child Poverty campaign, Caroline’s policy interests include integrated health and care, family policy, poverty and the role of the voluntary sector.
Caroline oversees Age UK’s influencing work and her team covers research, public policy, health influencing, media, campaigns and engagement and public affairs. She is also the Charity's lead spokesperson.
Caroline decided to work for Age UK because she could see that there was a lot to do to change policy and practice so older people are served well, and because she passionately believes that Age UK can make a big difference.
James is head of our research department in Age UK.
His responsibilities include:
He has a Visiting Professorship in Ageing at Loughborough University.
Jane Vass has been Head of Public Policy at Age UK since 2012, having joined Age UK’s predecessor, Age Concern England as Financial Services Policy Adviser in 2006.
She was previously an independent consumer consultant specialising in financial services from the consumer viewpoint. In this capacity she undertook research such as reports for the National Consumer Council on equity release and on financial capability for the Securities and Investments Board.
She also wrote the Daily Mail Tax Guide for 10 years. She was a member of the Financial Services Consumer Panel from 1999 to 2003, and from 1983 to 1993 she worked for Consumers’ Association.
Jane was given an OBE for her services to financial services in the June 2015 Birthday Honours list.
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