ePolitix.com - Forum Brief: Women's pensions

The government risks losing key women voters at the next General Election unless it reforms the state pension system, warns a new report published today (Mon 2nd Feb) by Age Concern and the Fawcett Society.

"The government welcomes this report and recognises the disadvantages that may be faced by women in retirement. Action is in place to tackle this, including a new option to transfer pension rights built up in one job and take them to another, benefiting a large number of women who have interrupted work records because they have been bringing up children, looking after elderly relatives, or working for short periods in different jobs.

"The State Second Pension is much more generous to low earners and also recognises carers rights, for the first time allowing them to qualify for an additional state pension.

"The introduction of Pension Credit is also a huge milestone in this government's dedication to tackling pensioner poverty - two out of three entitled to claim are women, with many already gaining as much as £70 or £80 a week extra."

Liberal Democrat Shadow Work & Pensions Secretary Steve Webb MP, said:"The government devoted a whole chapter of their pensions green paper to women's pension provision. One year later we wait the Pensions Bill and it's all gone very quiet. Once again women seem to have been overlooked.

"It is welcome that this new Report looks at plugging the holes in many women's contribution records, we should remember that even a full state pension is still woefully inadequate.

"The government still treat pensioners as second class citizens and women pensioners as third class citizens. The time has come for the Government to read its own evidence and act."

Michelle Mitchell, head of Public Affairs at Age Concern England said: "More than a year ago the government acknowledged that the pension system is failing women, but there’s still no sign of action.

"There is growing anger from women of all ages that the government isn’t listening to them. If the government fails to act, it will break its promise to create opportunity for all and it could prove costly at the ballot box.

"One in Four’ warns that if the government continues to bury its head in the sand on pension reform, future generations of women - particularly carers, full-time mums and low-paid workers - will spend their retirement in poverty. Future Governments will also be saddled with the spiralling costs of means-testing - women pensioners are twice as likely as men to need means-tested benefits to boost their retirement income.

"The report outlines cost-effective proposals the government could implement in the short-term to improve the system for women and increasing numbers of men. Proposals include a modern, flexible system of credits for carers; reducing the Lower Earnings Limit to bring low-paid workers into the national insurance system and scrapping an unfair rule which stops 100,000 people getting a pension in their own name, despite in some cases having paid thousands of pounds into the system."

Martin Green, chief executive for Counsel and Care told ePolitix.com: "The Age Concern/Fawcett Society report highlights the very important issue of pensioner poverty amongst women in the UK. Despite all the rhetoric about equality, many women suffer poverty because of the institutional sexism inherent in our system. This report highlights the problem and Counsel and Care calls on the government to take immediate action to ensure that older women receive an adequate income in retirement"

Don Steele director of social policy told ePolitix.com: " The Association of Retired and Persons Over 50 (ARP/050) welcomes and fully supports the call to action contained in 'One in Four', the new Age Concern and Fawcett Society Report on women and pensions. It is our view however that such reform can only take place within the context of a major re-appraisal of the way in which income in retirement is provided in this country.

"The regressive move toward means testing must be seen as a matter of considerable regret and the dependence upon market forces, with all its underlining risk, as nothing more than an additional layer of uncertainty for a section of society whose position in relation to pensions has for too long been set aside by successive governments. Only a reform of State provision will provide both men and women with the security they deserve".

Derek Brownlee, pensions executive at the Institute of Directors, told ePolitix.com:"Any sustainable pensions reform must take into account the basic state pension and the incentives provided for people to save for a second pension on top of this - this is not just an issue which affects women. There's probably not much financial point in making the very low paid pay more in National Insurance, as they will merely lose means tested benefits as they get extra basic state pension."

Serena Mitchell, communications officer for Opra told ePolitix.com: "OPRA acknowledges the important issues raised by Age Concern that cause many women to face poverty in retirement. Many of the points highlighted in the report are beyond our remit as regulator of work-based pension schemes. Whilst Opra's aim is to protect the interests of pension scheme members, our regulatory work mainly covers the activities of pension scheme trustees, their advisers, and in certain areas employers. However, we may be able to assist women on certain pension related matters.

"Women who took time out of work to care for children or relatives, or who have changed jobs, may have lost touch with a pension scheme they paid into with a previous employer or private pension provider. Opra provides a free pension tracing service which helps thousands of people every year to access pension scheme benefits that they otherwise might not have claimed.

"Figures released recently by the Office of National Statistics show that few women are benefiting from pension-sharing orders in divorce settlements. This is an option that divorcing couples should consider, and Opra would expect pension scheme trustees to disclose relevant information requested by either party during a divorce settlement. We can investigate cases where trustees or others involved with the running of pension schemes obstruct the process of pension sharing on divorce.

"Opra also has the power to ensure that employers offer their staff the ability to save into a stakeholder pension. These low cost, flexible pensions are designed to be easily transferable, and have no penalties for stopping or starting saving. For example, a woman on maternity leave may wish to stop payments into her stakeholder pension and resume them when she returns to work. We can look into complaints where an employer with five or more staff is not offering employee access to a pension scheme at work."

Mervyn Kohler, head of public affairs at Help the Aged, told ePolitix.com: "Women do badly from pension schemes, whether state or private. Most schemes were designed for a world where women stayed at home minding the family, and remained married to a faithful and supportive husband all their lives. Times have changed.

'"Women earn lower wages than men, are likely to work for fewer years, and then because of greater longevity get poorer annuities. The proposals in the Fawcett/Age Concern report will help to address some of this imbalance, and the government's pension reform proposals must address the situation with greater urgency. Women are poor pensioners today, and on present form look set to be poor pensioners in the future."

Donald Hirsch special adviser to the Jospeh Rowntree Foundation told ePolitix.com:"The situation of women highlights the still patchy nature of our pension provision. The problem is that the holes in our state pension system, designed around the model of the male breadwinner, are overlaid with holes in the means-tested "safety net", whose big flaw is the number of people not taking up entitlements. Unless we had some form of citizens income in retirement, it would be risky to reject the means-tested back-up, and we should be careful about being too dismissive of the pension credit and the contribution it can make. At the same time, the more we can strengthen entitlements and plug some of the gaps identifiedby this report, the less we should have to rely on means-testing (thoughof course this also relates to the level at which the retirement pensionis set). Perhaps the most important of the proposals is a stronger system for pensions for carers, and this means moving more decisively away from a model of pensions simply recognising paid work rather than the other contributions that people make."

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