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13 October 2011

The coalition’s £1bn pensions U-turn

Ministers delay planned rise in the state pension age to 66 to help women.

By George Eaton

For months, ministers have promised “transitional arrangements” to protect the 330,000 women (born between 1953 and 1955) who could have to wait up to two years longer than expected to collect their state pension. Now, they have finally acted. The planned rise in the state pension age to 66 in April 2020 will be delayed by six months to October 2020. It’s a small but expensive change – the BBC puts the cost at £1bn.

Given the coalition’s “woman problem”, it’s no surprise that David Cameron has acted. The most recent Ipsos MORI political monitor found that support for the Conservatives among women had slumped to 29 per cent, compared to 38 per cent among men. Worse for the Tories, a New Statesman/ICD poll published on 4 October found that 65 per cent of women would not consider voting for the party at the next election, compared to 55 per cent of men. The pension change, along with the £300m increase in childcare funding and the new curbs on internet pornography, is part of a calculated attempt to woo them back.

But it’s worth noting that the government’s public-sector pension reforms will still hit women – who account for two-thirds of those affected – hardest. The disproportionate number of women working in the public-sector also explains why female unemployment has reached 1.06m, the highest level since 1988. As I noted yesterday, 240,000 public-sector jobs have been lost in the last year, five times as many as the Office for Budget Responsibility predicted.

The Tories’ comparatively low support among women was one of the reasons that they failed to win a majority at the last election. Among men, the party led Labour by 10 points at the last election but among women it led by just 4. If Cameron wants to avoid another hung parliament, he will need to make further concessions, including on the economy.

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