State pension changes 'are unfair to
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 women'
 

Plans to increase the age at which women can claim their state pension are moving too fast, the Government's pension tsar John Hutton indicated yesterday.

In  a surprise intervention the former Labour Cabinet minister suggested it was 'unfair' to raise the state pension age so quickly that those affected cannot replace income lost.

The admission comes as a report shows women are retiring £6,500 a year poorer than men on average.

Meanwhile, nearly one in three women planning to retire this year has no pension savings whatsoever, research by Prudential found.

The Government's own figures show that controversial plans to accelerate the rise in women's state pension age to 66 will force up to 500,000 women in their fifties to work an extra one to two years longer.

Officials concede that the pace of the change means many of the women will not have enough time to make up the money lost.

At a pension conference in London yesterday Lord Hutton said: 'People not in a position to adjust their retirement plans cannot fairly be asked to do so.'

Though he is broadly in favour of raising the pension age, Lord Hutton is said to be concerned that ministers consider the full impact on those affected before deciding on the timetable for change.

Ros Altmann, of over-50s group Saga, said: 'The proposals are completely unfair. People need ten years' notice of a one-year rise in their pension age if they are going to have time to adjust. These women are getting six or seven years' notice of a two-year change.'

Under the changes the state pension age will reach 66 for both men and women by 2020. Under previous plans it was due to be raised to 66 between 2024 and 2026. A government study found that 330,000 women will have to work for at least an extra 18 months as a result of the changes.

In total, five million workers will be affected, with some losing as much as £13,500.

Vince Smith-Hughes, of Prudential, says the retirement gender gap remains 'stubbornly wide'. The women's state pension age may be equalised with men's, but those retiring this year expect to be 50% worse off.

Pension company Prudential says men are retiring on average incomes of £19,400 a year; women anticipate incomes of £12,900.

Smith-Hughes says it is imperative that women keep making pension contributions during any career breaks and also look into making making voluntary National Insurance contributions after returning to work.

It is possible to top-up your NI contributions so that you tick off the 30 complete qualifying years of payments needed get the full basic state pension, which is £102.15 a week until April 2012.