03 Feb, 2016
Government hounded over state pension “mis-sale”
The government has taken a battering by MPs after thousands of women born in the 1950’s look set to lose out due to controversial changes to the age limit for state pensions. deVere Group analyses how detrimental the new changes could be to these women’s retirement plans.
The problems surround the Pensions Act 1995, which included a clause that would increase the required age to access state pension from 60 to 65 during 2010 and 2020. However, the coalition government in 2011 moved to speed up this rate, which will see the state pension age (SPA) for women reach 65 at some point between April 2016 and November 2018. Even worse, the SPA for women by the year 2020 will have increased by another year to 66.
The Department for Work and Pensions was accused by one MP of a “gross dereliction of duty” for the way in which it notified the affected, whereas another commented that it was “cruel and heartless”. It has been estimated by experts that the new regulations could leave these women up to £30,000 out of pocket.
A campaign against the changes has already amassed over 140,000 signatures which helped to trigger the debate at Westminster Hall. They say the biggest losers are those born between 6th October 1953 and 5th April 1955 as their SPA will increase by more than a year. Campaigners have calculated that a year’s difference in age could result in a 3-and-a-half-year difference for the SPA.
At the debate, Labour MP Helen Jones criticised the government for waiting 14 years to start informing people after the 1995 bill had been passed, whilst also commenting that that they stopped doing so 2 years later. She claimed that the government was set to save an estimated £30bn because of the changes and made a particularly interesting point when stating that “if this was a private provider, we would be after them for mis-selling”.
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