http://www.seniorsnetwork.co.uk/womenspensions/fawcettsociety.htm


Facts & Figures

  a.. Retired men receive an average income of £202 a week, retired women
get only £161 (Department for Work and Pensions, Pensions & Incomes Series
July 2001)

  b.. More than twice as many older women as men are reliant on income
support (Department for Work and Pensions, Income Support Quarterly
Statistics Inquiry August 2001)

  c.. As many as 22% of women aged 55-59 had already spent more than 25
years outside the labour market and would not reach a full pension even with
full Home Responsibilities

  d.. Protection and an otherwise complete working record. (DSS Research
report 114, Building up Pension Rights)

  e.. A third of women carers spend over 20 hours a week in unwaged caring
work. (Social Focus on Women and Men ONS 1998) This caring work has been
valued at £39.1 billion a year (BMA report Taking Care of the Carers 1995)

  f.. In 1996/97 in Great Britain the average independent income received by
women in retired couples was around 40% of men's (Department of Social
Security)

  why are women pensioners poor?


  g.. Women are more likely to take on caring responsibilities and therefore
have time out of the labour market which affects their entitlement to the
Basic State Pension (which is calculated according to the number of years
worked).

  h.. Women are also more likely than men to be low paid and to work
part-time which also affects their access to occupational pension schemes
and their ability to pay into any pension scheme.

  i.. Women have suffered because the welfare system has been geared to men'
s patterns of lifetime earnings, to full-time employment with no or only
very brief periods out of employment.

  j.. The Welfare system assumed that women would be able to rely on their
husband's pensions to support them in their old age. Women were able to
choose a lower rate of National Insurance Contributions (married women's
contributions) as it was assumed that they would not need to build up
entitlement to benefits in their own rights. However the legacy of policies
like this is that older women living alone, either through divorce or
widowhood, make up the poorest pensioners1.

The current pension system


Basic State Pension: The BSP is a contributory benefit and is not means
tested. It is payable

to all those who have made the necessary National Insurance Contributions.
To be entitled to

a full state pension you have to have made National Insurance Contributions
for 39 years (44

if you are a man).

The BSP used to be linked to earnings, but as a result of changes in 1984
and 1995 under the Conservative Government, the BSP became linked to prices
instead.

91% of those without a full Basic State Pension are women (Government
figures given in a written answer in the House of Lords 21 July 1997). The
numbers of women entitled to the full BSP is increasing, because more women
are working and continue to work even after having children. Also the
introduction of Home Responsibilities Protection has helped to protect
entitlement to the BSP (see below)


Home Responsibilities Protection (HRP)


HRP aims to protect entitlement to the BSP for women or men, who are unable
to work due to caring responsibilities. HRP allows for up to 19 years out of
the labour market due to caring to be calculated as if you had been making
National Insurance Contributions. So if you made contributions for the other
20 years - you would be entitled to a full State Pension.


Pensioners currently over 80 would not have received the benefits of Home
Responsibilities Protection because it is only available for complete tax
years from April 1978 - too late to value the caring responsibilities many
of these women would have undertaken their whole lives.


SERPS


State Earnings Related Pension Scheme was introduced in 1978 . Employees
would contribute to SERPS unless they were contracted out and have an
occupational or personal pension instead.


Recently SERPS hit the news because of legislation passed in 1986 which
would halve the amount of SERPS a widow/widower would inherit if their
spouse died on or after 6th April 2000.   Although the legislative change
was made in 1986, there was very little publicity about this for a long time
afterwards. DSS leaflets were not updated for nearly ten years and many
people believed they were misled by the Benefits Agency.  This cut would
have particularly penalised older women who stayed at home to care for
children and who will be reliant on their husband's pension to provide for
them in their

retirement..


In November 2000, following on from calls for fairer proposals from various
NGOs, including Fawcett, the Government announced that the changes would
only affect those who are more than 10 years away from their state pension
age. For those within 10 years of pension the changes would be phased in for
those closer to retirement.



State Second Pension (S2P)


The S2P will replace SERPS as the State Second tier pension. It is aimed at
low income earners (under £9 500) a year and has a number of features which
will benefit women. For example it is aimed at low-income earners, most of
whom are women. In addition the S2P allows them to be 'credited' into the
scheme if certain conditions are fulfilled (such as caring for a child under
5 or caring for someone who is disabled for more than 35 hours a week2).


However Fawcett still has concerns that women will not see the full benefit
of these changes as the regulations compartmentalises women's lives in an
unrealistic way and may be unable to deal with the fact that women move
between full time and paid work, and managing different caring
responsibilities across their lifetimes.


Stakeholder Pensions


Aimed at low to middle income earners specifically those who earn over £9000
a year, they were introduced in April 2001. They are not state provided but
available from commercial financial services

companies like banks or building societies, but have to meet a number of
government standards aimed at ensuring that they offer value for money and
flexibility. The increased flexibility and low charges will benefit women in
particular, however there are still concerns as to whether these will
provide adequately for women. In particular women will find it difficult to
assess whether they will best be served by the S2P or whether to move into a
stakeholder pension as their earnings tend to fluctuate far more over the
course of their lifetimes than men's earnings.


Minimum Income Guarantee


The MIG is a means tested benefit aimed at ensuring that pensioners not
entitled to a full BSP receive a minimum income. The Government recently
announced a welcome increase in the level of the MIG, but despite a massive
government campaign to promote take up of the MIG, it is still clear that
many of those who are eligible to claim are not claiming3. This may be in
part due to the complexity of the claims process, but also the stigma
associated with claiming means tested benefits.


Pensions Credit


A new credit which the Government plans to introduce to encourage
individuals to save for their old age by rewarding those who earn money or
have savings over and above their BSP


How can we make the pension system work for women?


Changes in policies should help pensioners living in poverty now, and build
a system which

will work for the next generation of women pensioners.

The key to future pension reform is to use the more variable patterns of
employment which women experience as the premise of any new system. This
will benefit both men and women, as the changing nature of work means that
men too face periods of unemployment, job insecurity and short term
contracts which no longer fit traditional patterns of employment and
earnings.


Recent reforms have tried to take on board these differences but still
compartmentalise women's lives in a way that is unrealistic. Women's lives
tend to be flexible; moving between full-time and part-time work, as well as
 managing differing caring responsibilities, for children as well as parents
or older relatives.


It is also vital that the unpaid caring work women undertake needs to be
valued as an important social contribution. Carers should not have to
forfeit financial security in old age as a result of the worthwhile work
they undertake. The idea of crediting in parents who care for their children
and carers into pension schemes should be developed further and more
flexibly to allow for the multiple responsibilities which women juggle and
ensure they are adequately provided for in their old age.



--
Men are everywhere that matters!





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