UK – Radical changes are urgently needed on women’s pensions where only 30% qualify for a basic state pension and only 38% contribute towards a private pension, according to Britain’s Trade Union Congress (TUC).
The TUC was responding to the women and pensions report published earlier this week by the department for work and pensions (DWP).
“Women will not get a fairer deal without big changes in state pensions and moves to compel employers to pay their share,” said TUC general secretary Brendan Barber.
“This report increases pressure on the government and the Turner Commission to bring forward radical proposals to tackle the future of pensions.”
According to the report, only 30% of women retiring today are entitled to a full basic state pension – only 24% on the basis of their own contributions and only 17% are actually in receipt of a full basic state pension based on these contributions.
While female employment rates have increased to 70% today from 55% in 1983, only 38% of women are saving for a private pension versus 46% of men.
Men also receive on average £50 to £100 a week more in private pension income than women of the same age.
“Childbirth, marriage, divorce and widowhood all have significant impacts on pension accrual for many women – and this is reflected both in the incomes of today’s retired women and the predicted incomes of women retiring in the future,” the report stated.
Despite the fact that a reported 1.3m of the 1.9m people lifted out of poverty in retirement since 1997 are women, the DWP report emphasised that much more must be done.
“Many women are left disadvantaged by a pension system that is based on a view of society that is nearly 60 years old and which is largely predicted on women relying on their husbands for their retirement income,” said Tessa Jowell, minister for women and secretary of state for culture, media and sport.
Pension’s minister Stephen Timms stated: “Inequalities of income in retirement cannot be tackled in isolation from inequality during working life. The government is committed to a holistic approach that develops social and labour market policies hand-in-hand.”
However, the government is waiting for recommendations from the Pensions Commission’s report later this month, before it makes any reforms.
“Before we do anything we will look at the Commission report, which is expected to look at women and state pensions,” said a DWP spokesperson.
However, the TUC believes that changes regarding state pensions can be addressed now, and that this year’s budget can cater for these amendments.
“The government recognises that changes are needed, it’s just a matter of when,” a TUC spokesperson told IPE.
On November 7 the report will be discussed at a national pensions debate event in Manchester. It will be hosted by Timms and Jowell, and attended by stakeholders, representatives from the pensions industry and members of the public.