Millions could lose out when retirement age is raised

If you are already struggling to save for your retirement, there could be more bad news from the latest Government figures. A proposed plan to raise the age of retirement could see millions losing out on up to £14,000.

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Under the plans announced by Chancellor George Osborne, nearly half a million women will be forced to work up to two years longer before qualifying for the state pension and 4.5 million men and women will be expected to work an extra year.

As a result, those worst affect would lose nine per cent of their life's pension, equivalent to £13,500.

The changes, announced last month, mean that by 2020 both men and women will have to work until the age of 66 before retiring on a state pension.

And while the move will save the government billions of pounds, most working men and women will lose between three and five per cent of their lifetime pension.

Though the change is no big surprise (the Labour government had already announced the retirement age would rise to 66) things are moving much quicker than expected, leaving little time for people to prepare.

Pension campaigners are critical of the move. Ros Altmann, director-general of Saga, said women in particular will be badly affected.

"These changes are dramatically unfair and completely unacceptable," she told the Daily Mail. "I have never known women so angry. They know we have to save money and accepted a rise in the state pension age.

"But to hit them with a second one, with no time to prepare for it is causing real anger."

However, pensions minister Steve Webb defended the proposal, saying: "We are all living longer than ever before. As longevity increases it is only fair that costs are shared among the generations.

"Although women will experience the rise in the state pension age more quickly than previously planned, they will draw the state pension for longer."

The changes are expected to save taxpayers £30 billion over the course of 10 years.

What do you think? Is it only right that the retirement age is raised, or are you dreading the thought of working until 66? Leave your comments below...