air travel booking: Pension age change to be debated

Monday, June 20, 2011

Pension age change to be debated

The plans will see pension entitlement for men and women equalised by 2018

Government plans to make women wait longer for their state pension will be debated in the Commons later.

The Pensions Bill, which would see the entitlement rise from 60 to 65 by 2018, and then increased to 66 for both sexes by 2020, gets its second reading.

Critics from all parties say it is unfair on about 330,000 women in their late 50s who will need to keep working.

Ministers are looking at ways of softening the impact but say the changes will go ahead.

However the detail of any compromise which could help those women close to retirement are yet to be agreed, says the BBC's deputy political editor James Landale.

The Work and Pensions Secretary Iain Duncan Smith says he will stick to his timetable to raise and equalise the age when men and women can claim the state pension.

And a Department for Work and Pensions spokesman said: "If we delayed the move to 66, it would cost the taxpayer £10bn and would be an unfair burden on the next generation."

Last year, Chancellor George Osborne announced plans to accelerate the rate at which women's pension age will rise to equal that of men, currently 65.

The previous Labour government had agreed to achieve equalisation by April 2020, but the coalition's plans will see it achieved by November 2018.

Ministers would then use this extra time to raise the pension age to 66 for everyone.

MPs opposed to the changes include Conservative and Liberal Democrat backbenchers.

“Ministers must listen to reason on this issue”

Ros Altmann Saga director general

The critics say many women affected by the proposals will have to wait between 18 months and two years longer than expected before they get their state pensions.

They also say the changes are unfair as some women are being given as little as five years' notice of the changes.

Lorely Burt, chair of the Lib Dem parliamentary party, said those affected "won't have time to plan their retirement and many will be financially a great deal worse off".

For Labour, shadow pensions minister Rachel Reeves said it was "simply wrong to punish women by moving the goal posts at this late stage".

Conservative MP James Gray is among the Tories to want the coalition to think again.

"Going around the corridors and tea rooms in Westminster talking to Tories, Lib Dems and of course Labour MPs they are saying this is an injustice being done to a small number of people," he said.

Meanwhile, Ros Altmann, director general of over-50s organisation Saga and a former government adviser on pensions, says the government could face a costly legal challenge if they did not make changes.

"Ministers must listen to reason on this issue," she said.

"The current plans are unfair and may, indeed, be illegal in public law terms, since they clearly do not give women adequate notice of the large changes in pension age that they face."

The Commons debate comes as union leaders are threatening industrial action over the government's proposals for public sector employees to work longer and pay more for less generous entitlements in retirement.

Ministers said negotiations were still ongoing but shadow chancellor Ed Balls accused Mr Osborne of being "desperate" to provoke industrial action so he could blame the unions for the weak economic recovery.

This article is from the BBC News website. ? British Broadcasting Corporation, The BBC is not responsible for the content of external internet sites.