When it comes to pensions, Britain’s women are still a long way from equality. Why?
I n 21st-century Britain, there is still a shocking gap between men’s and women’s pensions. While public discourse has been dominated by the gender pay gap, which has been almost eliminated for women under the age of 40, women remain the poor relations when it comes to financial security in later life.
Official figuresshow most of the UK’s poorest pensioners are single women. This will not be easily resolved and the gender pensions gap exists in many other countries too. However, the very low level of state pension provision in the UK means that those who have little or no private pension wealth are at a serious disadvantage in retirement.
The chancellor, Jeremy Hunt, is reportedly planning to announce changes in the annual tax-free allowance for pension contributions, increasing it from £40,000 to £60,000 in tomorrow’s budget, as well as increasing the lifetime allowance (LTA) – the maximum amount workers can pay into their pension pot tax-free – by more than £500,000.
The chancellor is planning to improve childcare support for working mothers. That can help more women stay in work, but many will still only work part-time. In addition, the problems in adult social care will mean many older women leaving full-time work to care for older relatives.
First, we need to understand why this disparity exists. A principal reason for the gender pensions gap is simply that women have lower lifetime earnings. Over a typical working life, caring responsibilities usually mean women earn less than men. Since private pensions depend on earnings, this means women will have lower pensions.
Research shows that after having a first child, men’s earnings will generally keep rising, but women’s do not. Women are also more likely to work
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