State Pension 

The impact of the SPA increase

This means poorer workers will be more adversely affected by the increase in the pension age as they pay in for the same length of time (possibly for longer as they may have started work earlier), but will receive less benefit as they are likely to die earlier.

Gender imbalance

Since 2010, the women’s state pension age of 60 has been steadily increased by the government in order to match the men’s state pension age of 65. Researchers at the Institute for Fiscal Studies found that, as a result, more than 1m women in their early 60s have become poorer.  

According to the study, the household income of women aged between 60 and 62 is now, on average, £32 a week lower than it was before the state pension age began to rise in 2010. Women Against State Pension Inequality (Waspi) was established to represent the rights of women bornin the 1950s who feel particularly hard done by asa result of the increase. 

They support the equalisation of the state pension age between genders, but are angry at the rise in poverty among women between 60 and the state pension age; and at the minimal notice many had informing them of these changes, which meant they had too short a period in which to change their retirement plans.

Women are generally worse off in pension terms as they are more likely to stop working or to work part-time to have children, care for children, care for elderly parents, or care for grandchildren so their own children can work.

Therefore, women are likely to have fewer private pension savings, less saved in a workplace pension, and less personal wealth, so are likely to be more reliant on the state pension, which they will now have to wait longer to receive. They are also less likely to have the maximum qualifying years for the full state pension.

On average, women are likely to live longer than men, so the gender imbalance tilts in their favour in this respect.

Knock-on effects

As the state pension age increases, many people will need to work for longer. This is not necessarily easy as it can be difficult for people to find work in their older years from both a health and employment opportunities perspective, particularly for blue collar jobs.

The government is aware of the problems here and has looked at ways of supporting people who want (or need) to have longer working lives, including the abolition of the statutory default retirement age to ensure people cannot be required to leave their jobs purely on grounds of age.