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Women & Pensions Facts & Figures
The current pension system Basic State Pension : The BSP is a contributory benefit and is not means tested. It is payableto 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). 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 6 th 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 week 2).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 claiming 3. 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. Other sources of information
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Identity Theft in over 50s
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