Raising the retirement age to 66 makes sense to a degree, as long as the current gender gap is addressed

The furore over Tory proposals to raise the state retirement age for women at a rate apparently faster than planned by Labour makes sense on one level – we are all living longer, and will all have to work longer in order to make pensions affordable.

George Osborne has reassured women that any increase in their pension age to 66 will not happen until 2020, but this means there are women in their 50s who expected to retire at 60 and will have to wait another six years. The shadow chancellor should be very careful he does not punish women more than men in their grand scheme by failing to take account of the gross inequality women already face in retirement provision.

Their situation is a hidden scandal. They are far more likely than men to be reliant on the state in old age, and far more likely to face poverty. Research by Scottish Widows found that 59% of men are saving enough for a comfortable retirement, but only 47% of women. The pensions gender gap widened by 3% compared with last year because of the recession, and fewer women than men feel able to save this year, suggesting the gulf will widen further in 2010.

There are a number of obvious reasons: women often interrupt their careers for family reasons; their earnings are, on average, lower than men's; and they are less likely to have access to a good-quality pension scheme. Spending priorities are often different, since women focus on the short-term needs of the family at the expense of long-term pension investment for themselves; almost a fifth save nothing at all.

The government has helped by allowing women to buy in more years of national insurance contributions to compensate for time out of the workplace, but it could do more: one possibility is tax relief on contributions for payments into a pension plan by a husband on behalf of his wife while she has caring responsibilities.

But what women really need is an end to the inequality at work that means lower earnings while they are there, and a smaller pension when they have left. They need an end to discrimination against working mothers, far more effort by employers to help them return to the office after time out for the family, and the outlawing of Arlene Phillips syndrome, where female workers of a certain age are pointed towards the exit ahead of men of a similar vintage.

Any move to increase the state pension age more rapidly must be part of a wider strategy including gender equality and a commitment to end the pensioner poverty, which hits women hardest.

Polling reveals no great backlash against Conservative policy that hits pockets of 4 million people

We're starting to get a better picture of what the public think about the Tory spending cuts proposed by George Osborne on Tuesday. The BBC's Daily Politics show has just put out some figures from ComRes and the key one shows voters are split on the plan for a public sector pay freeze.

Osborne said that all public sector workers earning more than £18,000 – that's 4 million people – ought to have a pay freeze in 2011. ComRes is the first organisation to poll on this, asking people if this was "a good way to help reduce government debt" – 49% said yes and 48% said no.

The Tories will probably be relieved, because the poll does at least suggest that there is no great public backlash against the idea, although pedants will note that the question did not actually ask whether voters agreed that the pay freeze should go ahead.

The other key Tory proposal (unveiled on Monday night, before Osborne's speech) was for the state pension age to be increased to 66, 10 years ahead of schedule. A YouGov poll published on Wednesday showed voters split 44/44 on this proposal. ComRes asked whether this was "a good way to reduce government debt" and it found a narrow majority against the proposal – 45% of respondents said they were in favour, but 52% said they were against.

So, the two key Tory proposals aren't exactly popular. But they're not massively unpopular either.

There are other findings in the ComRes survey which are better for Osborne and David Cameron. The Tories are more trusted than Labour on creating the conditions for a strong economic recovery (12 points ahead), on cutting spending without harming public services (four points ahead) and on setting fair taxes (six points ahead). Labour is ahead on protecting jobs (five points).

ComRes found there was strong support for the Tory plan to stop families earning more than £50,000 a year getting child tax credit (72% for, 25% against). No great surprise there.

But there was an interesting finding on the Tory proposal to raise the inheritance tax threshold to £1m. Labour present this as a tax cut for millionaires (on the grounds, I suppose, that anyone inheriting a house worth £999,999 probably qualifies as a millionaire) and, described in those terms, the proposal seems to go down very badly with the public.

But ComRes flipped the proposition and asked voters whether they agreed that inheritance tax should only apply to property worth more than £1m. Put like this, the Tory idea is popular, with 71% saying inheritance tax should only apply to £1m homes, and only 26% disagreeing.

Economists were left confused tonight and unions critical about the plethora of public sector pay freezes and pension age announcements by the Conservatives and the government, but said neither party's proposals were close to what is needed to return public finances to health.

Government plans to freeze pay for 40,000 top civil servants and 700,000 other public sector workers were only seen to save £200m-300m a year – a drop in the ocean compared to the £175bn deficit the government expects to run in the current fiscal year.

George Osborne's promise to freeze the pay of 4 million public sector workers earning more than £18,000 a year would save an estimated £3.2bn a year from 2011.

Abolishing the national child trust fund for the rich, removing tax credits from families earning more than £50,000 and cutting bureaucracy are measures that would save £7bn a year by the end of the next parliament, the Conservatives say.

But Jonathan Loynes at Capital Economics was unimpressed. "This is small fry compared to the government's existing forecast that borrowing will still be close to £100bn a year at that point, a figure which could prove too optimistic," he said.

"It is clear much deeper spending cuts, probably involving huge cuts in public sector employment, will be needed."

Osborne also said the Tories were considering bringing forward raising the state pension age to 66 in 2016 for men and 2020 for women. The Conservatives pointed to estimates from the National Institute of Economic and Social Research (NIESR) that raising the age theoretically saves a hefty £13bn a year – equivalent to 1% of national income.

But NIESR said that calculation, to be valid, would require other changes, such as a raising of the age at which the minimum income guarantee kicks in.

But however small the savings might be from freezing public sector pay, trade unions were furious. "It cannot be right to single out public sector workers to pay the price of putting it right," said the TUC's general secretary Brendan Barber.

"Those who did so well out of the boom should now be asked to make their fair contribution through higher tax rates for the highest earners."

Derek Simpson, joint general secretary of Unite, criticised Osborne for plans he said had been written "on the back of a Bullingdon club membership card". "Osborne is a lightweight wielding a heavy axe aimed at hardworking families," he said.

The Royal College of Midwives warned a pay freeze could drive staff out of the profession. Jon Skewes, director of employment relations, said: "The birthrate has increased by over 20% and we have too few midwives. A pay freeze … may well cause existing midwives to leave."

Professor David Blanchflower, labour market expert and former member of the Bank of England's monetary policy committee, accused Osborne of having failed to understand one of the fundamental principals of economics.

"Cutting public spending in a recession is a really bad idea. I suspect Osborne will have to prepare for a spring, summer and especially winter of discontent in 2010 with widespread strikes in the public sector if the Tories get elected."

But Richard Lambert, director general of the CBI, said Osborne's speech showed a real sense of purpose. "He delivered a series of tough messages making it clear there are no easy choices. We still need to have a better understanding of his plans for public sector reform."

• This article was amended on Thursday 8 October 2009. We said the Tories were considering bringing forward raising the statutory retirement age: we should have said the state pension age. This has been corrected.

The Conservatives are proposing to raise the state pension age to 66. What will this mean for people approaching the end of their working lives and how will it affect their finances?

Who will be affected if the plans are implemented?

The shadow chancellor, George Osborne, is planning to raise the state pension age to 66 "no earlier" than 2016 for men and 2020 for women. This means men under the age of 58 and women under the age of 54 could be caught by the changes.

The state pension age is currently 65 for men and 60 for women. The government has already announced changes which mean that the state retirement age for women will increase by 12 months every two years from 2010 to 2020 to bring it in line with men.

Osborne said a Conservative government would instigate an independent review on this issue.

What does this mean for companies which impose a default retirement age of 65?

The retirement age imposed by employers has already come under scrutiny in court, and while it survived a legal challenge last week the government has said it intends to bring forward a review of the legislation which allows employers to set a minimum retirement age of 65. It is highly likely that the default retirement age will be raised or scrapped altogether in the very near future.

What can I do if I want to retire earlier?

Men or women under the age of 58 or 54 respectively should start saving as much as they can. According to independent financial advisers Hargreaves Landsdown, a 58-year-old today would have to save about an additional £55 a month for the next seven years to recoup the lost year's income, assuming the state pension rises at 2.5% a year until 2016, when it would be worth £5,743 a year.

Laith Khalaf, a pensions expert at Hargreaves Lansdown, said the extra money should ideally be saved in a private pension scheme to make sure the investor benefits from tax relief up front, or in an Isa or some other tax-efficient scheme if the investor needs to access to the money before retirement.

"The £55 saved into, say, an Isa returning 6% a year would produce a fund worth this amount [£5,743], which could then be substituted for the missing state pension," he said.

From today, people over 50 will be able to make use of a more generous Isa limit to top up their pensions. Over 50s will be able to save £10,200 in an Isa, up from £7,200.

I'm about to hit state pension age and was planning to defer my entitlement to get a bigger amount when I draw it. What should I do?

Osborne is expected to promise that no one who is a pensioner today, or approaching retirement soon, will be affected by the proposed change to the state pension age in 2016. People who defer their state pensions are actually helping the government out – it means the government does not have to find the money to make the weekly or monthly payments – so the Conservatives are unlikely to change the rules allowing deferral or make it less attractive. However, you should keep a close eye on how the Conservatives' plans develop.

• The headline of this article was amended on Thursday 8 October 2009. It suggested the Conservative party's proposals concern the retirement age: we should have said the state pension age. This has been corrected.

Measures announced by shadow chancellor likely to have little effect but supporters say Osborne has only just begun

George Osborne, shadow chancellor, has listened carefully to talk over recent years of a looming pensions crisis. His advisers say policies put forward on Tuesday to tackle the problem of ballooning retirement costs are just the start. They say he is well aware of figures showing Britain is ageing rapidly and the pot to pay for pensions is emptying at an alarming rate.

He also realises that Britain has one of the world's most complicated pension systems, with layer on layer of legislation, and that governments delve into its murky depths at their peril.

Pension experts said today that Osborne was to be congratulated for grasping the nettle of rising pension costs. It is not his fault he has only trimmed costs at the margins, they say.

The complex rules have only been made worse under a Labour government that has allowed a myriad of private sector schemes to coexist with a backstop state pension topped up by a new earnings-related state scheme along with means-tested pension benefits.

Osborne outlined three measures in his speech to the Tory conference.He will bring forward plans to increase the state retirement age to 66 to save £13bn a year from 2020. He will cap the pensions of public sector workers at £50,000 a year to save "hundreds of millions of pounds in pension liabilities" and he will review a £5bn cut in tax relief for occupational pensions.

The savings from making people work longer will largely be eaten up by a promise to increase the state pension in line with earnings. The cap on "fat cat" retirement incomes for public sector managers will disappear in a funding black hole that is estimated to be £1tn over the next 50 years. And any restoration of dividend tax relief for occupational pensions, which Labour dropped in 1997 against Tory opposition, will add to pension costs. Osborne said he wanted to spend the cash to encourage personal pension saving.

Opposition parties have leapt on the figures to show there is little benefit for the exchequer, which will be re-directing funds to other parts of the pension system more than it will be paying off national debt. They also accused him of shying away from fundamental reforms.

Only a year ago the Tories were tub-thumping about the pension system as a symptom of Britain's broken society.

Higher education spokesman David Willetts spoke of an inter-generational war breaking out that pitched 30-year-olds, unable to afford a home and weighed down by student debt, against the large minority of retirees whose free education and guaranteed retirement pensions allowed them to drive around in 4x4s, enjoy second homes and winter in Spain. He pointed out how age would be more important than any other factor in determining wealth. Losers in the pensions war would join the 6 million pensioners eligible for state retirement benefits. Those with a final salary scheme would join the baby boomer upper class.

Against the backdrop of this debate, party leader David Cameron promised a wide-ranging review of public sector pensions. Osborne aide Philip Hammond, himself a former pensions spokesman, talked about the need to cut the increasingly costly commitment to fund generous public sector pensions.

Perks that need examination ranged from retirement at 60 to historically low worker contribution rates. The party has vied with the Liberal Democrats to dominate the pensions debate.

But sources close to Tory central office say statements on public sector pensions were deliberately toned down this year.

Osborne feared the 4.5 million workers employed by the state who still enjoy guaranteed pensions would reject Cameron's reformed Tory party in favour of a safe haven with Labour.

The new realism on pensions was ditched in favour of measures that addressed part of the problem and hurt fewer people.

Lord Oakeshott, Liberal Democrat treasury spokesman, said only his party was now prepared to tackle Britain's pensions crisis in the round.

He said: "Is Osborne seriously suggesting saving £200m or £300m a year from capping public sector fat cat pensions will end Britain's pension apartheid? Putting up the state pension age to 66 in 2016, bottling out on public sector workers retiring at 60 is unfair gesture politics. The IMF would send him packing if he needed to borrow for Britain."

Oakeshott is not alone in believing Osborne has ducked the pensions apartheid question. Since the stockmarket crash of 2003 it has become obvious to everyone in the pensions industry that investments cannot pay for the final salary pensions of private sector workers. Employers, equally aware, have reduced the number of active members in these schemes from more than 4 million to under 800,000 through a series of cutbacks and scheme closures over the past decade.

Funds needed to cover the workers who retain their final salary pension rights are deep in deficit. On average they are 75% funded and wrestle with a total deficit of more than £180bn.

Osborne has indicated he wants to plug some of the gap with the money Gordon Brown saved with his tax dividends "stealth tax" on occupational schemes. But that money has been spent on other things and plugging holes in pension deficits with taxpayer funds is a policy rejected by many at the top of the pensions industry.

They ask if the £10bn paid in tax relief on pensions contributions to higher rate taxpayers should continue. People earning more than £40,000 a year get the lion's share of tax breaks for pension saving. Economist Ros Altmann, once an adviser to Tony Blair, believes it should be top of the agenda.