Millions of women will wait years longer for a pension equal to that of men when the pension age is increased to 65 unless there is urgent action to make the system fair‚ warns Age Concern and Fawcett.

A new report‚ A Blueprint for Reform‚ published today (Friday‚ April 22) by Age Concern and Fawcett warns that the outdated pension system fails to take account of women’s needs or working patterns and the least well off are likely to be hit hardest by the changes.

One in five single women pensioners lives in poverty and women are less likely to have an occupational pension because the types of employment that they are involved with often have poor coverage. The report puts forward a series of cost-effective reforms to make the system fairer.
 
In just five years – April 2010 – women will have to work for longer and there will be a move towards a system where women make the same contributions as men to qualify for a Basic State Pension. But the system already fails many women and the new rules will do little to solve the problem of pensioner poverty.

The pension system was designed more than 50 years ago and is littered with obstacles for women. Only 16% of newly-retired women have a full Basic State Pension on the basis of their own National Insurance contributions compared to 78% of men. The Government has recognised the scandal of women’s poverty in retirement and pledged to look into the issue‚ but has so far failed to act.

Age Concern and Fawcett are calling on the next Government to accept the recommendations and immediately start the process of reform. A Blueprint for Reform sets out four steps to change the system: ensuring individual rights to a pension‚ providing a platform for savings‚ providing a pension for all and making private and occupational schemes work for women.

Michelle Mitchell‚ head of Public Affairs at Age Concern England said:

“The major political parties recognise there is a scandal around women and pensions‚ but we need action and not words. A Blueprint for Reform outlines four ways the system can be reformed. The proposals are simple and would reduce the number of women suffering poverty in retirement.

“Many women are angry that the system fails to give them a decent income and it is an issue that is likely to affect their votes on polling day.”

Dr Katherine Rake‚ Director of Fawcett and one of the country’s leading experts on women and pensions said:

“Raising the pension age for women will lead to an expectation of equality with men. But the pensions system was designed back in the 1940s so doesn’t represent the needs of modern women.

“Women tend to receive lower pensions because they earn less than men during their lifetimes. Increasing the pension age will not change this and will do nothing to reduce the number of pensioner women living in poverty.”

Note to Editors:

Download a copy of the report by clicking on the PDF document.

The Basic State Pension age is set to increase in April 2010. The age will increase gradually on a step-by-step basis until it reaches 65 in 2020.

Age Concern and Fawcett are calling on the next Government to follow a new pension blueprint for women. It steps out four steps we believe are urgently needed to tackle the scandal of female pensioner poverty:

Step one: ensuring individual rights to a pension. The pension system must be reformed so that women can build up their own entitlement to a pension.

Step two: providing a platform for savings. The Government must guarantee that all those with a full pension entitlement will be protected from means-testing and therefore be given an incentive to make additional savings. To achieve this the level of the Basic State Pension should be raised to at least £109 per week.

Step three: providing a second pension for all. A reformed Second State Pension system should be used to improve the position of those not covered by an occupational or private pension and for those on low earnings who cannot afford to make additional pension contributions.

Step four: making private and occupational pensions work for women. Action needs to be taken to make private and occupational pensions better reflect women’s working patterns. They also need to be more transparent and easier to understand.

Spokespeople are available for interview from Age Concern and Fawcett.

Radio producers – Age Concern has an ISDN line.

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Susanna Mordaunt
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