TPAS report shows pensions crisis is worse for women than men
Women are second class citizens when it comes to pensions
Women in their late 50s or older have lost out most in both state and private pensions
Many women do not yet know their state pension age is rising – Government needs to inform women urgently about state pension changes
by Dr. Ros Altmann
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Women lose out most in both state and private pensions:
The Pensions Advisory Service (TPAS) Survey exposes the particular pensions problems faced by millions of women. For years, women have been the second class citizens in both state and private pensions. This particularly affects women already in their late 50s or older. Women have shorter working careers than men, so they have less years during which they can save for a pension or contribute to national insurance and women also earn less than men when they are working, once again leaving them with less chance to save for a pension and leaving them with lower state pensions as they lose out on the earnings-related element of the system.
Older women were banned from private pensions when they started work: The women in their late fifties or more today have been the most disadvantaged by the UK pension system. When they started work – around 1970 or before – it was legal to ban women from joining private pension schemes if they married or worked part-time. In the early part of their career, these women faced significant discrimination in the labour market and often earned less money for doing the same job as a man. Over the years, the discrimination against women has reduced, but this cannot undo the disadvantages faced by older women in their earlier careers.
State pension assumed women would rely on a husband’s pension: The state pension system did not credit these older women for years spent caring for children or other relatives and did not recognise their contribution to society if they were not earning enough. In those days, the state pension system was designed by men, for men who assumed women would rely on their husbands for a pension in later life. Women were even encouraged to pay a ‘married women’s stamp’ for their National Insurance, which meant they accrued no state pension rights at all. Even with all the reforms of state pensions over the years, women have remained at a disadvantage, as they were not fully credited into the additional earnings-related state pension.
Many older women do not even know about the changes to their state pension age: Womens’ state pension age is changing rapidly at the moment, as the Coalition has increased pension age for women in their late fifties with very short notice. Many of these women are unaware of the delays they will face. As more women are now single in retirement, and their work history means they have lower private pensions than men, it is more important than ever that the Government gives women enough information to be able to help themselves to maximise their opportunities to build up a better state pension.
DWP needs to write to women affected to help them understand their rights: I urge the DWP to ensure it writes to all women to let them know what their state pension entitlement is and how to buy extra years of contributions if they can. Any woman who is unsure about her situation should contact the Pensions Advisory Service national helpline to make sure they are better informed and can plan as best they can. It is a brilliant service, staffed by volunteers from across the pensions industry. You can call them on 0845 601 2923 and the service is free.
Older women are particularly angry about their pension changes: Many older women are particularly angry about the dramatic pension changes that have been imposed on them by the Coalition since 2010. Already record numbers are working past state pension age, but not all are able to, so they need as much help as possible to prepare for retirement.