Global pensions article outlining injustices of women’s pensions

by Dr. Ros Altmann

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The UK state pension system is not fit for purpose.  It is ludicrously complex and discriminates against women.   Women normally have lower occupational or private pensions, because carers, part-time workers and lower earners are unable to save as much  as those with a full work career.  However, state pension entitlements also depend on contributions from waged work, so women suffer a double whammy.   The original idea of state pensions was to provide social insurance, but this has become confused with the role of pensions as a savings vehicle to generate income in later life. 

UK State pensions have been continually cut, as successive Governments attempt to transfer responsibility to the private sector, but this has undermined the social welfare role of state pensions, leaving millions with inadequate provision.  In addition, women often suffer from various illogical state pension rules.  It is waged work – and only with high enough wages – which counts properly towards state pensions.  For example, jobs paying under £82 per week accrue no pension, so women with several part-time jobs, each paying below this level,  receive no pension entitlement, even if total weekly earnings exceed £82.  Anyone without 10 full years of contributions gets no pension entitlement at all – contributing for up to 9 years loses everything.

Women fulfilling socially vital caring roles, fitting working lives around these responsibilities, are penalised by the pension system for doing so.  Around two-thirds of pensioners are women, but incomplete working careers and cuts in state pensions force the vast majority onto means-tested pension credit to avoid poverty.  Complex reforms have attempted to give women ‘credit’ for time spent caring, but women are still treated as ‘second-class’ pension citizens.  Home Responsibility Protection (HRP) only credits full tax years and also depends on work records.  Taking off a full calendar year receives no HRP.  Women working for 10 years and claiming 20 years HRP receive 50% of Basic state pension, while someone working 30 years receives 70%. 

Women can no longer be assumed to rely on a husbands pension.  Women need their own pensions, acknowledging the value of their social contribution outside just the waged labour force.  A citizen’s pension, giving everyone the right to a decent state social welfare pension, without the humiliation and complexity of means-testing, would achieve this.  Radical reform is long overdue, to finally deliver a state pension which is fair to women and which everyone can understand.