[Pounds Sterling]14,000 Pension Blow Hits Millions; Older Workers Pay Price of Retirement Age Rise

Article excerpt

Byline: Jason groves Political Correspondent

FIVE million people stand to lose up to [pounds sterling]14,000 each as a result of the Government's plan to raise the state pension age, it emerged yesterday.

Detailed Government figures revealed the dramatic impact of the change on millions of people in their 50s. Almost half a million women will have to work for up to two extra years before qualifying for their state pension under the changes announced by Chancellor George Osborne.

About 4.5million men and women will be forced to work for up to a year longer than previously expected. Most will lose thousands of pounds they would otherwise have received.

Official figures revealed that as a result the worst affected would lose 9 per cent of the total pension they can expect to receive over their life. The calculation is based on actuarial assessments of how long people live.

Crucially, an impact assessment conducted by the Department for Work and Pensions admits the changes are being brought in so quickly that people will not have time to make up more than half the loss in their retirement income.

Under the changes announced last month the state pension age will reach 66 for both men and women by 2020, saving the government billions of pounds.

Last night the DWP said the 9 per cent loss was equal to [pounds sterling]13,500. But officials stressed the figure represented a 'worst case scenario' and did not take account of an individual's ability to make up lost pension through extra contributions or other benefits.

For most men and women affected, the rise in the state pension age will lead to a loss in total lifetime pension of 3 to 5 per cent. The figure includes the amount of money lost in both state pension and pension credit paid to those on low incomes.

Pension campaigners reacted with fury, with one branding the changes 'dramatically unfair', particularly to women.

Ros Altmann, director-general of the over-50s group Saga, said women in their mid-50s were being hit with a rise in their state pension age for a second time. …