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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.”
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