Why should I miss out on the new flat-rate pension?

28 May 2013

Q

I read with dismay women born between April 1952 and July 1953, which includes me, will receive a lower rate of pension of £133 when we retire. About 430,000 women will lose out on state pension worth an average of £312. Can you explain why I will lose out and whether I can do anything about it?
From
MT/Lampeter

A

While it's true an estimated 430,000 women will miss out on the new flat-rate pension in 2016, they will still be better off than men of the same age who will qualify.

In equalising the state pension age for men and women, the government of the day could not just defer women's state retirement age overnight and so it was phased in over a number of years.

An ill-thought-out aspect of the introduction of the flat-rate pension is it will be introduced before the equalisation of state pension ages has completed, and, as such, some women are still due to retire earlier than men of the same age.

So although women born between April 1952 and July 1953 may receive a lower state pension and therefore appear to be worse off, they will still be receiving it between 15 months and three years earlier than men of the same age and this accumulated earlier income will add up to a tidy sum, and so overall women are likely to be better off.

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