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Older women are £50 a week worse off because of the rise in the state pension age

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New research shows that older women are poorer because of the rise in state pension age. In fact, women are getting £50 a week less on average. How else are women affected?

Older women are poorer because of the rise in the state pension age

The research, by the Institute for Fiscal Studies, looked at the income that women receive and how this has been affected by the rise in state pension age. It found that:

  • Increasing the state pension age from 60 to 63 has meant an 8.7% rise in the chance of a woman of that age being in absolute poverty.
  • For single women aged 60 – 63, the rise in state pension age meant a 13% increase in the chance of being in absolute poverty. If you’re part of a couple, it’s 4%. If you rent your home, you’ve got a higher risk of being in absolute poverty because of the state pension age than if you own it.
  • The increase in state pension age so far has left women £50 a week worse off on average. Women who are in lower income households lose more. Households are £32 a week worse off, on average.
  • Only a small percentage of women were better off because of the rise in the state pension age. These were women who continued to work full time.
  • There is no increased risk of poverty after women qualify for their state pension. This doesn’t surprise me as – in my view – it’s the lack of state pension that’s directly responsible for the reduction in income.
  • Women who have had their state pension age raised are not ‘materially deprived’ even though they are on a lower income. The report says that this is because women have ‘smoothed out their consumption’ – i.e. gone without.
  • The government is £5 billion a year better off by not having to pay state pensions and from getting tax from women who are still working.

Older women and poverty

The research, by the Institute for Fiscal Studies, uses government statistics on earnings and spending. This is from interviews with 20,000 households (the Family Resources Survey). Questions that were included in the survey to find out if people are ‘materially deprived’ include:

  1. Can you keep your home in a good state of repair?
  2. Can you afford home contents insurance?
  3. Can you save £10 a month for a rainy day?
  4. Can you replace worn out furniture?
  5. Can you replace broken electrical items?
  6. Do you have a small amount of money to spend on yourself?

Although the report found that some women are going without as a direct result of the rise in state pension age, the Institute for Fiscal Studies says that effect doesn’t last once their state pension kicks in.

Related articles:

History of the state pension; 10 things you need to know about how it affects women

Raising the state pension age to 66; when will you get your state pension?

National Insurance credits – NI credits could increase your state pension

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