Cameron-Clegg pension plans worsen women's prospects

22 June 2011

The Cameron-Clegg Coalition have reneged on a commitment in their own Coalition Agreement on pensions.

The commitment in the Coalition Agreement was that the government "would review the rise to 66, though women's state pension age would not start to rise to 66 until 2020".

Under their new proposals, the speed of raising of the pension age to 65 for women will be now accelerated to take place by 2018 for women, and to 66 for both men and women by 2020.

Throughout the UK, some 300,000 women born between 6 December 1953 and 5 October 1954, will be required to wait for additional 18 months, and a further 33,000 born between 6 March 1954 and 5 April 1954 will be required to wait an extra 2 years before being granted their state pension.

The latter group stand to lose around £10,000 in their state pension or over £15,000 if they receive full pension credit.

In Parliament, the Tory-led government , faced with voices of opposition from within the Coalition have declared itself, through Duncan Smith, to be "tempted" to look again at arrangements for the switchover.

The fast-tracking of pension age breaches the recommendations of the 2005 Turner Report that enjoyed comprehensive political support, and which proposed that women be given 15 years' notice to prepare for rises in pension age to enable them to adapt their arrangements for living accordingly.

However, under the Cameron-Clegg plans many women will now have less than half of that time to adjust, leaving insufficient time for alternative plans for the future.

If we examine women's employment opportunities and earnings, we can see how their pensions are already disadvantaged by their roles in life other than as employees.

By midlife, women more so than men have provided unpaid care for their families at all stages of life, and have seen their employment opportunities and earnings reduced by bringing up a family.

As a consequence, they lose out on their pensions.

Most women do not have the male-pattern of continuous employment opportunities because this pattern is not compatible with what are still mainly women's caring responsibilities.

Women form the large majority of employees in public sector areas such as local government and the NHS, and the public sector provides better prospects of adaptive work for women compatible with domestic caring duties and caring.

However, government spending cuts have seen thousands of these jobs vanish, with the result that women's employment prospects are eroded even more, further affecting their pensions.

Add to this a working lifetime of a gender pay gap and in retirement generally higher levels of pensioner poverty amongst women than men, and we can see how the Tory-led Coalition's plans will reinforce these depressing inequalities.

For younger women, the pensions "reform" augur pensions based on higher contributions for "career" average pensions.

However, there are alternatives such as those advocated by the Women's Budget Group.

Oh that the Tory-led Coalition could be "tempted" into introducing some of their proposals :

  *Ensuring adequate pension rights for those with justified career breaks – mainly women – must be the policy priority in the EU to guarantee a dignified life in old age for both women and men’ (AGE Europe, 2010).
  *Allowing more time for women’s State Pension Age to rise
  *Continuing to combat age discrimination in employment
  *Introducing a residence-based Citizens Pension for all over state pension age, set above poverty level (60% of median population income).
  *Ensuring adequate indexation of pensions

Unions Together video : "Hands off our pensions" campaign



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