IntelliJ IDEA 13 uses Java 1.5 despite setting to 1.7

Question

Despite specifying JDK 1.7 in all project settings (including in File -> Project Structure -> Project :: Project SDK), the following error is produced by

Answer 1

I managed to fix this by changing settings for new projects:

1. File -> New Projects Settings -> Settings for New Projects -> Java Compiler -> Set the version

2. File -> New Projects Settings -> Structure for New Projects -> Project -> Set Project SDK + set language level

3. Remove the projects

4. Import the projects