The TUC have highlighted the plight of womens’ pensions this week with a new report Time for action that reveals the extent of the problem.
The Trades Union Congress (TUC) say that a combination of low pay, part time work, jobs that don’t come with pensions and shorter working lives mean that compared to men, women are facing a smaller pension pot.
The problem is made more acute by the number of women pensioners and those in work. Women make up the majority of Britain’s pensioners, accounting for 56% of all those over 60, and over two-thirds (67%) of those aged over 80.
More women than ever before are also in the workplace, 56% of over 16s have a job. This compares to 71% of men. The number of part-timer workers, however, who are female equates to as many as four in ten that is 43% or 5.2 million.
Working part time, say the TUC is one of the biggest factors contributing to poor pensions for women.
Earnings are 22% less for part-timers than women who work full time and the pay and pensions penalty paid by part time women in the UK is amongst the biggest in Europe. Only 15% of unskilled women who work part time are in company pension schemes.
Rates of pay are also playing a part in the pensions deficit for women. Women earn 86% of the hourly pay for men and while the quarter of women on the lowest incomes earn £5.86 an hour or less, men in the bottom quarter earn £7.49 or less.
The problem also escalates when the employment of women is examined. Low paid jobs including waitressing, care work, hairdressing, retail, cleaning, and secretarial and admin work are all dominated by women.
TUC General Secretary Brendan Barber commented:
“Our pensions system was not designed with women in mind. It is out of date and condemns many millions of women to an uncertain and precarious retirement. Our pensions crisis has a very definite female face with women being penalised and losing out for taking time out of work to bring up their children. The Government needs to act to put a stop to this continuing pensions gender inequality. A few small changes would make a major difference to women’s lives and at a cost that won’t break the bank.”
The Time for action report makes a number of suggestions for action:
- Compulsory system to force employers and employees to contribute to pensions
- Lifting of the 25% rule that stops women with less than ten years of National Insurance contributions getting any state pension
- Provisions to allow women to buy back more than the six years of National Insurance contributions that they are currently limited to
- Allowing further backdating to help women fill the gaps in their contributions record and increase the level of their state pension
The TUC remain opposed to raising the retirement age. They say that given the large numbers of women who work in the public sector, raising the retirement age from 60 to 65 will disproportionately disadvantage women.