Older people 'oppose pension plans'

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Four out of five older people are against plans to change the state pension system which will leave 30,000 women approaching retirement "out of pocket", according to Age UK.

The Pensions Bill outlines plans for the new single-tier state pension for people reaching state pension age on or after April 6, 2016.

Age UK said that while the changes will help many women, others will lose out. It said Government estimates show that 40,000 people reaching state pension age in the first five years of the new system will have a lower state pension as a result of the changes and nearly 30,000 of them will be women.

Research by the charity found that 79% of 2,000 people aged over 50 oppose the changes.

The single-tier pension will be based on individual qualification, so people will not be able to inherit or derive rights to the single-tier pension of their spouse.

The current system allows people who are, or who have been, married or in a civil partnership, to use their partner's record to receive a state pension or to increase the amount they receive on their own record.

Under the plans, there will be transitional protection if someone has already built up contributions or credits on their National Insurance record under the current state pension scheme.

Of those people surveyed for Age UK, over half (57%) believe the changes are unfair and that people should be able to claim on their partner's contribution record if their own falls short of giving them a full state pension.

One fifth (22%) believe that people should rely on their own contributions but that the Government must give people enough notice of the changes so that they can properly plan for their future.

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Age UK said that while it supports the principle of women building up their own pension rights, people need enough time to adjust.

Caroline Abrahams, charity director at Age UK, said: "The aim of this reform is to introduce a fairer state pension yet it cannot be fair to change the rules without giving people enough time to also change their retirement plans.

"Many of those affected will have made life choices and planned their retirement finances carefully with their partner only to find them in disarray if there is insufficient transitional protection in place.

"We are urging the Government to correct this injustice so tens of thousands of women can receive the pension they expected, giving them precious financial security in later life."

A recent report by the Pensions Advisory Service found that many women ''do not know where they stand'' when it comes to the state pension and several thought that changes were being made too swiftly for them to do much to alter their plans.

Women often weave paid work around their caring responsibilities and tend to be more heavily reliant on the state pension for their retirement income than men.

The single-tier pension - which will affect around 40 million people of working age when it comes into force - will run alongside the Government's landmark plans to automatically enrol people into workplace pensions in the coming years, to encourage confidence in retirement saving.

Ultimately, the reforms are intended to reduce people's reliance on means-tested benefits and give more certainty about the value of saving into a private pension scheme.

A Department for Work and Pensions spokeswoman said: "We are creating a state pension that is fit for the 21st century.

"The number of women who rely on their husband's contributions for a pension is declining year on year because women have been able to build up a state pension in their own right.
"Women will particularly benefit from the new flat rate state pension, with around 650,000 reaching retirement in the 10 years after it is introduced benefiting by on average £8 a week.
"We are making special arrangements for women who have paid Married Woman's Stamp within 35 years of reaching state pension age. They will get a pension based on their spouse's contributions plus any additional pension they may have of their own."

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