Mum using savings so she can care for grandkids recalls ‘awful’ state pension age shock

Thérèse Coffey confirms they are 'not reviewing state pension age'

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State pension age rules currently allow most retirees to claim their pensions from the age of 66, although further changes are ahead. However, under previous rules, women born in the 1950s reached their state pension age at 60. In the mid-1990s, a new state pension act was introduced which raised this state pension age from 60 to 65 to equalise it with men. The DWP claims the women affected by this were given plenty of warning and time to prepare for the changes but in late July, the PHSO ruled actions taken by the DWP from 2005 onwards were not considered good enough.

The costs of these failures have been recently highlighted by Tina Sylvester, a retiree who assumed she would be ok to give up work and help look after her grandchildren, knowing her state pension could soon be claimed.

Speaking to the BBC, Mrs Sylvester explained that when their father died from cancer, her two daughters decided to become nurses to help others. With this in mind, Mrs Sylvester felt she could support her daughters ambitions by helping them look after their own children.

“They had other careers and they wanted to go into nursing, I thought, yes, I’ll be getting my pension in a couple of years’ time,” she said.

“I gave up work in 2011 and I had savings so I thought it would be fine. Then in 2012 I got the letter saying you’re not going to get your pension at 60.

“It was a real big shock to me because that was what I was planning for and had been since I was 15. It was awful. When I was 60 I went back to work – in a playgroup first, and in a cafe.”

Mrs Sylvester said she thought the changes made to the state pension age had unfairly discriminated against women. “It is surprising how difficult it is to be listened to,” she said.

“A lot of people, whether it is because of our age, seem to think we won’t be able to change anything. You do feel like the weaker sex. I’m sure if it was all men demonstrating about their pensions I’m sure people would take note of them.

“It is like one big lie that you’ve lived. Everybody wants equality – but it was not equality because men now have to work an extra year and we have to work an extra six years.

“If they wanted real equality, why didn’t they bring the retirement age up for us, and down for men, to 63? That wouldn’t have hurt as much.”

Following the emergence of the state pension age issues, the WASPI campaign welcomed the PHSO review, which found a number of “failings” in how the DWP communicated the changes to affected women.

PHSO found actions taken by the DWP from 2005 onwards were not considered good enough and it argued the DWP “failed to make reasonable decisions” with the information available for the changes.

In response, WASPI called for the Government to “urgently compensate all women affected rather than making them wait even longer while the PHSO completes further rounds of its investigation.”

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Debbie de Spon, WASPI’s Communications Director and Angela Madden, WASPI’s Chair, issued a joint statement in response to the PHSO report.

They said: “Today’s findings reinforce what we, unfortunately, knew all along; that the DWP failed to adequately inform 3.8 million 1950s born women that their state pension age would be increasing. The DWP’s own research showed that women were not sufficiently aware of the changes, yet they failed to act.

“This inaction had devastating and life-altering impacts on women across the country. These women have been waiting for many years for compensation.

“We cannot wait any longer. We are calling on the Government to agree to fair and adequate compensation for WASPI women rather than allow what has become a vicious cycle of Government in-action to continue.”

Retirees across the board will need to prepare for further changes down the road, as the Government will be increasing the state pension age further to 67, for both men and women, between 2026 and 2028. Beyond this, it will reach 68 by 2046.

Retirement prospects do not look promising for British savers at the moment, with new research from abrdn (formerly Standard Life) showing many retiring in 2021 fear they do not have enough money to last.

A survey of 2,000 UK adults, who were either due to retire in the next 12 months, or had retired in the past 12 months, found that two in five (37 percent) people retiring this year are worried they won’t have enough money to last through retirement.

Overall, just two in five (39 percent) of those planning to retire this year feel very confident that they are financially ready. Within this, women feel less financially ready to retire than men, with just a third (34 percent) feeling very confident, compared with more than two in five men (43 percent). Of the soon-to-be retirees surveyed for abrdn’s Class of 2021 report, nearly half (48 percent) said they plan to reduce their spending habits to support themselves in retirement, while nearly one in three (27 percent) expect to continue to work part time and a fifth (21 percent) plan to sell their property or downsize.

Ben Hampton, a Retirement Advice Specialist at abrdn, commented: “With retirement potentially lasting 30 years or more, it’s vital that people are fully aware of how they’re going to make their money last. After the last few years, we think initiatives like Pensions Awareness Week are more important than ever for people to get back on track with retirement plans after so much upheaval in other parts of their lives.

“Being aware of how much you will need to meet your retirement goals, how much you can afford to spend and how this could change as the years go on, as well as considering how to piece together different types of income options, can be daunting. This is why preparation is key.

“The Government’s health and social care levy announcement adds a new element to the retirement planning puzzle. If you decide to work part time through retirement, especially after state pension age, you’ve got a new dynamic in the mix. Speaking to an expert will help you plan so you can take full advantage of the options available to you.”

It should be noted while many retirees are in a precarious position, additional research from Hargreaves Lansdown (HL) showed the finances of the over 65s had the most resilience in the face of the pandemic. HL’s research showed:

  • Over 65s have approximately six times more saved in ISAs and current accounts than the 25-34 age group
  • 82 percent of over 65s report no trouble keeping up with bills. This compares to 65 percent in 25-34 age group.
  • Meanwhile, seven percent of 25-34 years olds said they were keeping up with bills, but it was a constant struggle in comparison to just two percent of over 65s.

Helen Morrissey, a senior pensions and retirement analyst at Hargreaves Lansdown, concluded: “This data shows how retirees have been much better insulated from the financial shocks of the pandemic than younger age groups who have been hugely impacted by redundancy and furlough. The increased financial resilience of the over 65s in part brought about by higher levels of savings in ISAs and bank accounts means this group has been much better able to deal with the day-to-day financial pressures brought about by COVID. In turn, this means they are far more likely to be keeping up with their bills and credit card payments – something which is causing a bigger burden for younger age groups.”

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