A work and pensions select committee report has suggested early retirement for women who have not had the state pension age increase effectively communicated to them.
In its report, published today (15 March), the committee recommended the government commission an independent assessment options with regard to state pension ages.
These recommendations include slowing the increase in state pension age to 66; revising the timetable for increases in the state pension age to reach 65 by April 2019 and 66 by April 2021.
Additionally it suggested retaining the Pensions Act 1995 timetable for increases in the qualifying age for pension credit; and a transitional pension benefit.
In January this year, the work and pensions select committee raised concerns over evidence state pension statements and forecasts are confusing, contradictory and not providing people with essential information.
In its latest report, the committee stated: “We will never know how many women did not know, or could not be reasonably expected to know, that their state pension age was increasing.
“What is apparent with hindsight is that previous governments could have done a lot better in communicating the changes.”
It added well into this decade far too many affected women were unaware of the equalisation of state pension age at 65 legislated for in 1995, and that while last and current governments have done more to communicate changes, this has been “too little too late for many women” and “many thousands of women feel aggrieved.”
However, the report also states that extending the timetable for increases in the state pension age or widening eligibility for pension credit “would be prohibitively expensive and could have significant unintended consequences”.
The report also stated the committee is interested in idea of permitting early retirement, from a specified age and for a defined cohort of women on an actuarially neutral basis.
This would permit women to take lesser weekly payments for the duration of their retirements in order to retire sooner.
Adviser View
Tom McPhail, head of retirement policy at Hargreaves Lansdown, said permitting early retirement would be an effective compromise, allowing those women who have been affected by the increase in state pension age the option to draw on their state pension at the time they originally expected, albeit at a reduced rate.
He said: “Politically this could be quite attractive as it would show the government is listening and is sympathetic, without it actually having to cost any money.”
ruth.gillbe@ft.com
