As a result of changes to the state pension age, more than a million women are now expected to be £32 per week worse off.
The government moved the pension age from 60-63 between 2010 and 2016, a controversial move which only now is showing its full effects.
This news is undoubtedly a sign that the poorest and most vulnerable in society are being hit the hardest by recent economic policies, and could foreshadow more pension changes further down the line. Here are some considerations on its effects.
Rich and Poor
The effects the change is having were calculated based on state pension data from the IFS, with both rich and poor households included in the calculations. This means that the drop in income is far more severe for poorer households, especially those which heavily rely on the state pension for support.
It is also worth noting that the majority of richer households also have a substantial private pension/ample savings to support them in later life, making the gap between rich and poor even wider on a national scale.
With a significantly lower income, many pension age women will now have significantly less to spend on their daily essentials, and as a result could have a much lower quality of life. With this in mind, there is also likely to be a great deal of anger surrounding the inequality which this points towards, with men potentially being better off in their retirement compared to women.
This is largely because older women are more likely to have gaps in their national insurance contributions as a result of caring for children and elderly (responsibilities traditionally placed on women before steps towards equality were made).
One of the main effects of this change will be the amount of people living below the poverty line in the UK, especially given that many cannot afford to save as much as a result of stagnating wages and a poorly performing economy.
More women are now having to work longer in order to support their lesser pensions, and the number of women working past 70 has doubled in the last four years, showing the lengths they must go to in order to support themselves in later life.
It is likely that the effects of changes to the state pension age will be felt for many years to come, and also that the age could rise even higher as a result of longer life expectancy and a cash strapped economy.
Partly as a result of pension uncertainties, more people are now looking to take control of their own financial destiny through taking out alternative pension plans like SIPPs, which are offered by firms like Bestinvest. With a SIPP, much more choice is given to the owner, who can invest their money in assets/markets of their choosing.
Ultimately, there will be a great deal of dissatisfaction amongst both the older and younger UK generations, especially since many people now face the prospect of working longer and still earning less when they retire. Women who are worse off and rely more on the state pension will be the worst affected, and equality in both gender and wealth now seems one step further away.