BARONESS ALTMANN: Women are STILL second-class citizens for pensions

The Court of Appeal judgment is a blow to the many women who believe the sharp increase in their state pension age from 2010 discriminated against them.

I support the concept of state pension age equality, and it is difficult to defend women being able to start their state pension five years before men, while also having longer life expectancy.

But equality of state pension age is by no means pension equality. Indeed, the average woman’s pension is far lower than a man’s — with latest estimates showing a 40 per cent gender pensions gap.

Equality of state pension age is by no means pension equality. The average woman’s pension is far lower than a man’s – with latest estimates showing a 40 per cent gender pensions gap

This inequality feeds the sense of injustice felt by so many women waiting longer than they expected for their state pension.

In reality, women have always been — and still are — second-class citizens in the UK pension system. Not only far more reliant on the state pension, because they have much less private pension than men, women also normally have a much lower state pension than men, too.

Women often lose out because of their societal role. More women work in lower-paid sectors and are often those caring for family, so they earn less than men of their age, work part‑time and have shorter working lives and lower lifetime earnings than men.

Since private pensions depend on income, women also have lower private pensions. So pension reforms aiming at improving gender equality should take this into account.

The UK pension system particularly penalises the low-paid, the majority of whom are women. But reforms could benefit all other low-earners, too.

Here are some examples of urgently needed reforms to improve women’s pensions.

* The National Insurance lower earnings limit penalises people with multiple low-paid jobs — who are mostly women. 

Those earning under £120-a-week in two or three roles receive no credit for their state pension. 

The Government has refused to address this problem, despite thousands of women losing out each year.

* The much-vaunted state pension ‘triple lock’ [which promised to increase state pensions each year by the highest of earnings, prices as measured by the Consumer prices Index, or 2.5 per cent] does not protect the oldest and poorest pensioners (again, mostly women) because means-tested Pension Credit only has to increase each year with earnings.

The triple lock protects the old basic state pension but not Serps, otherwise known as state second pension, while the full new state pension (only paid to the youngest pensioners) is fully triple-locked.

* Women who don’t claim child benefit (even when they know their or their partner’s income leaves them ineligible) miss out on credits for their state pension.

* Auto-enrolment rules only require people earning over £10,000 a year to be automatically put into a pension at work. 

So, again, those with more than one job, each paying less than £10,000 a year, lose out in private pension auto-enrolment.

 * More than a million women, earning under £12,500 a year, are also being forced to pay 25 per cent extra for their pension due to the way the scheme their employer has chosen operates. 

Most are unaware of this issue with net pay. Many will be more likely to opt-out of pensions because their take-home pay is lower than it otherwise should be.

Government measures to promote pension equality and reduce the overall cost of state pensions have focused too much on increasing the state pension age, and also failed to adequately warn women in time to prepare for delayed pensions.

It is high time to place more emphasis on redressing these other gender pension inequalities as soon as possible. Women need and deserve better pensions.

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