Over 400,000 older women to lose £100s

Old lady's handsPlans to introduce the new 'flat-rate' pension for all those at state pension age in April 2017 will rob some 430,000 older women of an average of £310 a year, the Government has admitted.

This is because the group - born between April 1952 and July 1953 - will qualify for the state pension before then, unlike men of exactly the same age.%VIRTUAL-SkimlinksPromo%

The forthcoming pensions revolution will see all Britons of state pension age will get a 'flat-rate' pension worth £144 a week - as long as they have at least 35 years of National Insurance Contributions (NICs).

But around 430,000 women born in the early 1950s will miss out on the new deal. Instead, a woman born between April 1952 and July 1953 will typically receive a state pension of £127 per week.

That's a big drop over the course of a year, which is why the Department for Work and Pensions (DWP) research concluded: "It could have a significant impact on the state pension received over the course of a lifetime, in comparison to a man with an identical NICs record."

The figures have enraged many older women, especially as men born between the same dates will reach their state pension age of 65 after the changes come into effect in April 2017 and will therefore get the higher state pension of £144 a week.

Neil Duncan-Jordan, from the National Pensioners Convention, thinks they are right to be angry.

"There is a group of women who are being particularly disadvantaged by the Government's pension changes," he told the Daily Mail. "The goal posts keep on moving for them."

However, the DWP insists that the women affected by this issue will still be better off because they will get their state pension for between 15 months and three years longer than a man of the same age and this will mean up to an extra £20,000 in extra pension payments.

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Over 400,000 older women to lose £100s
Figures from charity Age UK show that 29% of those over 60 feel uncertain or negative about their current financial situation - with millions facing poverty and hardship. Even though saving for retirement is not much fun, the message is therefore that having to rely on dwindling state benefits in retirement is even less so. To avoid ending up in this situation, adviser Hargreaves Lansdown recommends saving a proportion of your salary equal to half your age at the time of starting a pension. In other words, if you are 30 when you start a pension, you should put in 15% throughout your working life. If you start at 24, saving 12% of your salary a year should produce a similar return.
Many older couples rely on the pension income of one person - often the man. Should that person die first, the other person can therefore be left in a difficult position financially.
One way to prevent financial hardship for the surviving person is to take out a joint life annuity that will continue to pay out up to 67% of the original payments to the surviving partner should one of them die.

The disadvantage of this approach, however, is that the rate you receive will be lower. Again, the Pensions Advisory Service on 0845 601 2923 is a useful first port of call if you are unsure what to do.

Around 427,000 households in the over-70 age groups are either three months behind with a debt repayment or subject to some form of debt action such as insolvency, according to the Consumer Credit Counselling Service (CCCS).

Its figures also show that those aged 60 or older who came to the CCCS for help last year owed an average of £22,330. Whether you are retired or not, the best way to tackle debt problems is head on.

Free counselling services from the likes of CCCS and Citizens Advice can help with budgeting and dealing with creditors.

Importantly, they can also conduct a welfare benefits check to make sure you are receiving the pension credit, housing and council tax benefits, attendance and disability living allowances you are entitled to.


The average UK pensioner household faces a £111,400 tax bill in retirement as increasing longevity means pensioners are living on average up to 19 years past the age of 65, according to figures from MetLife. And every year in retirement adds an extra £5,864 in direct and indirect taxes based on current tax rates to the costs for the average pensioner household. You can be forced to go bankrupt if you fail to pay your taxes, so it is vital to factor these costs into your retirement planning.It is also important to check that you are receiving all the benefits and tax breaks you are entitled to if you want to make the most of your retirement cash.

The cost of a room in a care home in many parts of the country is now over £30,000 a year, according to figures from Prestige Nursing and Care. So even if the prime minister announces a cap on care costs - last year the economist Andrew Dilnot called for a new system of funding which would mean that no one would pay more than £35,000 for lifetime care - families will still face huge accommodation costs. Ways to cut this cost include opting for home care rather than a care home. Jonathan Bruce, managing director of Prestige Nursing and Care, said: "For older people who may need care in the shorter term, home care is an option which allows people to maintain their independence for longer while living in their own home and should be included in the cap." However, the only other answer is to save more while you can.
Older Britons are often targeted by unscrupulous criminals - especially if they have a bit of money put away. For example, many over 50s were victims of the so-called courier scam that tricked into keying their pin numbers into their phones and handing their cards to "couriers" who visited their homes. It parted consumers from £1.5 million in under two years. Detective Chief Inspector Paul Barnard, head of the bank sponsored dedicated cheque and plastic crime unit (DCPCU), said: "Many of us feel confident that we can spot fraudsters, but this type of crime can be sophisticated and could happen to anyone." The same is true of boiler room scams that target wealthier Britons with money to invest, offering "once-in-a-lifetime" opportunities to snap up shares at bargain prices. Tactics to watch out for include cold calling, putting you under pressure to pay up or lose the opportunity for good, and claiming to have insider information that they are prepared to share with you.

According to the Financial Times, Pensions Minister Steve Webb said: "Many of this group of women will be thousands of pounds better off by being able to draw their pension years before a man of the same age, and they would not thank us if we made them wait years longer for their pension."

The fact remains, however, that these women's weekly state pension payments will be lower for the rest of their lives.

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