The retirement age for women has been raised to meet with the men’s retirement age. But a group of women born in the 1950s claimed the move was unfair as they have not been given enough time to make adjustments to financially cope during these years without a state pension. These women argued that it was a form of discrimination, but judges dismissed their claims in court today. So what is the pension age now and how will it change in the coming years?
The state pension age is regularly reviewed by the Department for Work and Pensions (DWP) to ensure it is affordable and fair.
As people are living longer and spending a larger proportion of their adult life in retirement, it was proposed that the pension age be increased to meet the increased demands on pensions.
According to the DWP when the State Pension was introduced in 1948, a 65-year-old typically had 13.5 years to spend their pension, which represented around 23 percent of their adult life.
However, as life expectancy has risen, the number of retirement years has simultaneously grown.
In 2017, the average 65-year-old could be expected to live for an additional 22.8 years, representing 33.6 percent of their adult life.
The retirement age for women rose from 60 to 65 in December 2018, to meet with the men’s retirement age.
The retirement age for both men and women is due to rise again to 66 years old in October 2020 and will rise again to 67 between 2026 and 2028.
A report published in August 2019 entitled Ageing Confidently – Supporting an ageing workforce recommended that the state pension age be increased to 70 by 2028 and 75 by 2035 to ensure that the old age dependency ratio remained in the sustainable range of 20 to 25 years over the next 20 years.
The report claimed “for many people, 70 is the new 50”, saying today’s older people are healthier and score higher on cognitive tests, meaning they are not ravaged in the same way by poor health and frailty that was commonplace years ago.
You can check what age you will be able to retire using a specially formatted calculator available here.
It also enables you to check what age you will qualify for Pension credit and when you are eligible for free bus travel.
All you need to know to use the tool is your gender and date of book.
Why were the Backto60 women opposing the state pension age increase?
It is estimated 3.8million women were in the position that if they had taken time out of work to care for children, they were paid less than men and therefore could not save as much in occupational pensions, meaning the change would hit them harder.
Some of the women who say they are disproportionately affected by the state pension age changes have said they could potentially lose out on more than £40,000.
But the government said a reversal of these pension changes would cost more than £215billlion for 2010 to 2011 and 2025 to 2026 – with around £181bn of that figure being given to women while the rest would be given to men.
In a summary of the court’s decision, the judges said: “There was no direct discrimination on grounds of sex because this legislation does not treat women less favourably than men in law.
“Rather it equalises a historic asymmetry between men and women and thereby corrects historic direct discrimination against men.”
The court also rejected the claimants’ argument the policy was discriminatory based on age – adding that even if it was, “it could be justified on the facts”.