With the state pension age of women rising from 60 to 63 in the six years, the government is providing £4.2bn less through state pensions and other benefits, the think-tank concluded.
Increasing the women’s pension age coupled with raising employee national insurance contributions has saved more than £5.1bn in the financial year 2015/16, the report noted.
The savings are likely to go up when the pension age rises to 65 in 2018 and 66 in 2020.
Jonathan Cribb, a senior research economist at the IFS, pointed out: “The tax and benefit system is much more generous to those above the state pension age than those below it.
“So while increasing the state pension age is a coherent response to the public finance challenge posed by rising longevity it does place a further pressure on household budgets.”
Today’s study acknowledges that affected households are receiving about £74 a week less in state pensions and other state benefits as a result of the change.
Although, it did note for women aged 60 to 62, who are now under the state pension age, the reform has also increased employment rates, increasing the gross earnings of these women by £2.5bn in total.
Cribb added: “The increased state pension age is boosting employment – and therefore earnings – of affected women but this is only partially offsetting reduced incomes from state pensions and other benefits."
The IFS report stated there is no evidence that the changes in pension ages for women has increased measures of material deprivation.
