Women left behind in the pension stakes
The pay gap that women suffer during their working lives becomes a vast pension gap in later life, according to the latest research from Age Concern.
Women receive just 32p for every £1 of income received by men in pensioner couples, and almost a quarter of single female pensioners live in poverty.
The charity, which has conducted the study in association with the Fawcett Society, claims that the state pension system is largely to blame for the discrepancy.
Katherine Rake, director of the Fawcett Society, and one of the country’s leading experts on women’s pensions, said: “The state pension is particularly important for women because of lower pay, broken employment records and less access to occupational pensions.”
And yet within the state system there are often barriers to women building up an effective pension through National Insurance contributions.
Because it is old-fashioned the system works on the assumption that women will rely on men to support them. However as the Fawcett Society points out, many women are lone parents – forcing them to take time out of work without the safety net of a partner’s NI contributions – while many women are widowed during their retirement.
And women are more likely to be in the lower income bracket, where earnings are below the NI threshold and they therefore make no contributions at all during their working lives. .
The Government’s pensions green paper on pension reform, has recognised the problems that women face, but is accused of failing to offer any solutions or alternative policy proposals.
Measures that the Fawcett Society and Age Concern are urging the Government to consider include:
– bringing more low paid women and men in to the National Insurance system;
– introducing more state pension credits for those who take time out of work to care for children or older people;
– guaranteeing that every woman, whether in employment, caring or unable to work for reasons such as a disability, receives a decent state pension that is free of a means-test;
– and improving financial advice, because many women believe they are automatically entitled to a full state pension regardless of their NI contributions.
