Is the government pension policy failing women?

The Institute of Fiscal Studies (IFS) have found that women in their early 60s are poorer as a result of delays in their state pension, according to a new study.

The household income of women between the ages of 60 and 62 was £32 a week lower than expected – which might explain the sharp rise in poverty rates in that age group.

However, the state as a whole benefits, with £5.1 billion a year going into the treasury as savings are made on pensions and women are paying more tax contributions as they need to work for longer.

While the pensions debate continues to rage, Theresa May’s government says it policy towards retirement is “fair and sustainable” – as it matches rising life expectancy.

Despite this, Women Against State Pension Age Inequality (WASPI) told the BBC that the IFS research was “shocking”.

“Once again, this shows that the government has implemented state pension age reforms without adequately considering the full impact of these changes on the women affected,” said WASPI director, Jane Cowley.

The changes in pension policy have meant whole generation of women have continued to stay in employment, long after their seniors retired.

However, the IFS study has shown that the effects that this has had outweighs the benefits of earning a salary.

So, the 60-62 age group may be earning £2.5 bn a year extra – the equivalent of £44 per week. However, the same group have lost £4.2 bn in pensions and other benefits – or the equivalent of £74 per week.

Talking to the BBC, Jonathan Cribb, of the IFS, said the new policy was clearly putting pressure on the budgets of some households.

“The increased state pension age is boosting employment – and therefore earnings – of affected women but this is only partially offsetting reduced incomes from state pensions and other benefits,” he said.

“Since both rich and poor women are losing out by, on average, roughly similar amounts the reform increases income poverty rates among households containing a woman who has reached age 60 but has not yet reached her state pension age.”


Could peer-to-peer lending help your retirement funds?

Over the past decade, peer-to-peer lending has proven itself to be a safe, successful and viable option for people looking for a healthy return on investment.

But could it provide an alternative source as potential pension income for your retirement?

According to AltFi Data, more than £10 billion has been invested through UK peer-to-peer lenders – returning an average of 7.17 per cent total gross interest.

Large numbers of people are looking for alternative ways of investing their pension pot before and during retirement. Many have been taking advantage of the cheaper rates and higher returns offered by this type of service.

What is peer-to-peer lending?

Peer-to-peer lending (sometimes known as P2P lending) is the lending of money to individuals or businesses through online services which match lenders to suitable borrowers.

The services run much more cheaply than traditional lending as there are none of the usual overheads, being operated solely online. Because of this, lenders can earn higher returns compared to savings and investment schemes from the high street financial institutions.

However, like with any form of lending, there is a risk of the borrower defaulting on the loans taken out from peer-lending websites.

Last year, interest rates on one-year Pensioner Bonds saw retired investor to seek other ways of securing better rates. Some loans see risk reduced with the backing of tangible assets such as property and jewellery.

There is a large selection of places to begin your P2P lending. Peer-to-Peer SIPPs (self-invested personal pensions) allow people to share in the funding of a loans portfolio to businesses, which have proven their credit worthiness.

While there are many other options to boost pension funds, peer-to-peer lending has grown in popularity in the past ten years. This rise in profile may be a reaction to the financial crash in 2008, which saw a huge drop in confidence and trust in traditional banking institutions. But it could also be that this new, alternative movement has seen borrowing and lending take on a more diverse and transparent approach in keeping with the changes of the new millennium.