The coalition government has refused to amend plans to fast-track changes to the pension age, which mean that 500,000 women in their 50s will have to wait up to two years to collect their state pension.
But in the second reading of the Pension Bill yesterday, Secretary of State for Work and Pensions Iain Duncan Smith conceded that he may be prepared to consider “transitional arrangements” proposed by MPs from any party that could help those worst affected by the proposals.
Such help is expected to mean higher welfare payments for those women who are out of work but unable to claim the state pension because of their age, which would be funded by increasing the state pension age still further for other workers.
The government’s proposals will see the state pension age for women equalised with men at 65 in 2018 and at 66 from 2020, two years earlier than previously planned. The changes will affect up to 4.7 million people, although most will have their retirement delayed by only a matter of months. Women born between December 1953 and October 1955 will have to wait more than a year and, in 330,000 cases, up to two years, however.
The situation has sparked a growing backbench rebellion from all political parties, with many arguing that women have been given insufficient time to make alternative arrangements.
But Duncan Smith acknowledged for the first time during the Commons debate that the Conservatives had broken the coalition agreement not to raise women’s state pension age to 66 until 2020 after receiving legal advice. But he also claimed that failing to make the change would cost an extra £10 billion.
The pensions industry reacted with dismay to the government’s unwillingness to cede more ground on the pace of change.
Joanne Segars, chief executive at the National Association of Pension Funds, said: “The government needed to revisit this issue to try and iron out the unfairness, and it’s disappointing they haven’t listened. Telling someone in their late 50s that they’ll have to work another two years is out of order, and leaves many struggling with the switch into retirement.”
While she agreed that the state pension age for women should be brought into synch with men’s, she pointed out that women were bridging a six year gap and so needed more time to catch up. “For 330,000 women, the process has to become more manageable. The government must step forward quickly with details on how it will help them,” Segars said.