Pension age: Warning for Scottish women who are now forced to wait longer to retire

02 March 2011

By Jeff Salway
Experts have warned women approaching retirement to take action now to soften the blow of a rise in the state pension age over the coming years.
Thousands of women in their fifties face a prolonged wait for the state pension, under plans set out by the government. The state pension age was already going to be increased to 65 over the next few years, but the coalition government last year said it would accelerate the process.

The increase in the state pension age for women was to be being phased in over ten years, but the rise from 63 to 65 will now take place between 2016 and 2018 – instead of 2016 to 2020 – while the move from 65 to 66 for both men and women will occur between 2018 and 2020, six years earlier than the previous government planned.

Women aged between 50 and 57 will be most affected, with those aged 56 and 57 hit hardest. Those born between 6 March, 1954, and 5 April, 1954, currently 56 years old, will now have to wait an extra two years before claiming their state pension. An estimated 33,000 women in the UK are in this category.

Some 330,000 women born between 6 December, 1953, and 5 October, 1954, will have to wait at least a further 18 months to get their state pension, compared with the current timetable. An estimated half million born between 6 October, 1952, and 5 April, 1955, have at least an extra year’s wait.

David Gow, of Acumen Financial Planning in Edinburgh, said: “Women born on 6 April, 1954, could previously have expected to receive their state pension just after their 64th birthday. Now they have to wait until they are 66. A woman born a year and a day earlier, on 5 April, 1953, will still get her state pension before she turns 63.”

The loss of income is potentially substantial. A 55-year-old woman born in 1955 who a few years ago expected to get her state pension at 60 will now have to wait until she is 66, equating to a loss of £37,000 in state pension.

Unions say the proposals contravene last year’s coalition agreement, in which the government said the increase in the pension age for women to 66 would not begin before 2020.

But with little prospect of the government backtracking, the emphasis has shifted to how women can bridge the gap between their original state pension date and the new arrangement.

A 55-year-old still hoping to retire at 60 rather than 66 would need to save more than £6,000 each year between now and turning 60 to cover the lost state pension.

Gow said the changes underlined the danger of relying on the state for retirement income.

“For many people, the state pension – although valuable – is usually only a small part of their retirement income.

But the bare fact is that those affected will either have to fall back on alternative savings or continue to work for longer. Money stashed away in individual savings accounts (Isas] could be drawn upon, for example.”

The stumbling block here is that women have been disadvantaged when it comes to pensions. An estimated four in ten women in their fifties have no pension or private savings to fall back on. The average 56-year-old woman has savings of just £9,100, only a sixth of the average sum saved by a man the same age, according to Unison.

So what should you do if you face a delay in claiming your pension? The first step to take is to clarify your state pension age. This can be done at Then you can start planning ahead. The only option for many women in employment – half of whom are in part-time jobs – will be to continue working until their new state pension age. Finding a new job – full or part-time – or increasing your hours in your current job may also help.

Those not in work can find out what benefits they may be entitled to, if any, by visiting or calling 0800 802 2000.

Ultimately, however, the focus for those with a few years to retirement should be on boosting their savings to ensure they can bridge the gap between finishing work and claiming their state pension, according to Andy Cumming, managing director at Scott-Moncrieff Wealth Management.

“A 40-year-old woman won’t get her state pension until she is 67 and even with 20 years to save, she would need to put away an additional £1,750 each year to be able to retire at 60 and bridge the gap to the state pension,” said Cumming.

Similarly, a woman aged 55 would need to save an extra £40 a month (or £475 a year) for ten years to replace one year’s lost state pension, said Gow.

“A 50-year-old would not have to save quite so much, needing to put aside just an extra £25 a month, or £304 a year, assuming investment growth of 6 per cent and inflation of 2.5 per cent,” Gow added.

It’s also worth ensuring that you are entitled to the full state pension when you do eventually retire, as this is denied to those without 30 qualifying years of national insurance contributions (NICs).

Only last year that requirement was reduced from 39 in order to help women with broken career records – such as those who have taken time out to raise children – boost their entitlement.

If you’re still short of the necessary years, you can top up your NICs with voluntary contributions if you already have 20 years under your belt and your state pension age falls between 6 April, 2008, and 5 April, 2015. You can pay for six missing years dating back to 6 April, 1975.

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