The publication of the Government’s report on women and pensions is a crucial opportunity to tackle the inequalities faced by millions of women in retirement.

Why is the Government publishing this report?

Age Concern and the Fawcett Society have been leading the campaign for better pensions for women since April 2003. In April 2004‚ Vera Baird MP tabled an amendment to the Pensions Bill‚ supported by Age Concern and the Fawcett Society‚ asking for the Government to publish an annual review of the situation for women and pensions. In response‚ the Government announced it would publish a one-off report on the issue in 2005.

Why is the current situation for women and pensions a problem?

One in five single female pensioners in the UK now lives in poverty and just 16% of newly retired women qualify for a full basic state pension on their own contributions compared to 78% of men.

The state pension system‚ designed in the 1940s‚ has not kept pace with the changing lives of women. Injustice is deep-rooted: low paid women are excluded from building up a state pension simply because they earn too little; pensioners are living in poverty because they have taken time out of paid work to care for their family; thousands of women are paying into a system that doesn’t pay out in return; and older and younger women are finding that rigid rules and red tape stop them from building up secure second pensions. 

The current pension system compounds the inequality women experience in the workplace and fails to recognise their important role within society as carers. 

What has the Government said on the issue already?

Since the publication of the Government’s Green Paper on pensions in 2003‚ the Government has made repeated promises to improve the situation for women but has so far failed to act. 

• “Many policy suggestions that emerged during the consultation [for the Green Paper on pensions] proposed ways in which National Insurance cover could be extended to include more women. We will examine these and other considerations.” Government paper ‘Working and saving for retirement - action on occupational pensions’‚ June 2003
• [Women’s pensions will...] “lag behind that of men for some years to come.” Government Green Paper 'Simplicity‚ security and choice: Working and saving for retirement'‚ December 2002 
•  “My enthusiasm has not waned for tackling a real and substantial problem which is that women's pensions are‚ in a sense‚ a national scandal in the sense that only 50% of women get the full basic state pension.” Alan Johnson to work and pension select committee‚ October 2004
• “It’s a challenge that results from so many people having been let down by the system in the past; the scandal of women who have been badly treated because the system is based on dependence on their husbands and they are disregarded in terms of caring duties; the scandal of not recognising the tremendous contribution that people have made‚ not just in bringing up children but in caring for elderly and frail relatives. So one of the key tasks of the Commission will be to bring forward radical proposals to ensure that that historic scandal is overcome.” David Blunkett Labour party conference speech‚ September 2005
• “There will be a proper basic state pension; and alongside it‚ because in the modern world the state cannot provide it all‚ a simple easy way for people to save and to reap the rewards of their savings.” Tony Blair Labour party conference speech‚ September 2005

How will this report fit into the publication of Adair Turner’s report on November 30?

The Government will not do anything to address the problem for women before the long-awaited publication of Adair Turner’s report at the end of November. Once published however‚ the Government - and David Blunkett particularly - will be under immediate pressure to consider the recommendations and take action.

The way forward...

Despite repeatedly admitting that the situation for women in retirement is a “national scandal”‚ the Government has continually failed to act.

But the answers are there: one option could be to introduce a universal state pension which would certainly bring more women into the state system. This proposal however could prove to be a huge administrative burden as the Government would need accurate records of residency in the UK for the whole qualifying period. An alternative‚ favoured by Age Concern‚ could be to keep the contributory system but to reduce the number of years needed to qualify‚ for example from 40 to 25‚ which would immediately give the majority of women a full entitlement to the full basic state pension.

Instead of ongoing analysis‚ we need urgent and radical reform of the pensions system to tackle this injustice. The Government will not achieve long-lasting‚ successful pensions reform unless it puts the needs of women and carers at its heart.

The statistics...

• One in five single female pensioners lives in poverty in the UK (source: DWP 2005)
• 16% of newly retired women qualify for a full basic state pension on their own contributions compared to 78% of men (source: Government Principles for reform‚ 2005)
• For every £1 a man receives from a pension‚ a woman receives 32p (source: Individual income of Men and Women 1996/7 to 2000/1‚ Women & Equalities Unit‚ 2001)
• A third of young women (31%) aged 24-35 plan to rely on their partner for a pension (source: Age Concern/ ICM research‚ June 05)
• 75% of people want carers or those in part-time or low-paid work to have their contribution recognised in the same way as full-time employment (source: Age Concern/ ICM research‚ June 05)
• Just 3% of women of Pakistani origin have a company pension (source: Ginn‚ J and Arber ‘Pension prospects of minority ethnic groups: inequality by gender and ethnicity’‚ 2001)
• 81% of female hotel and restaurant workers do not even have access to an occupational pension (source: Age Concern ‘Who is under-saving for retirement?’‚ July 2004)

For further information or comment‚ please contact Helen Wanless or Susanna Mordaunt.

Media contact:

Helen Wanless
Susanna Mordaunt
Telephone:
020 8765 7514/ 7503
Email:
Media Team