Retirement equality is less than equal

Marlene Outrim

Marlene Outrim

Another landmark, but also another blow for women and equality in terms of income in retirement.

From November 6, women in the UK have now begun to qualify for their state pensions at the same age as men – currently 65 years old.

The move to equalise male and female pension ages began 25 years ago, under John Major’s government, and has been gradually phased in.

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Women who were 65 on November 6 will therefore be the first to wait for as long as men, although critics say women are still a long way from pension equality, as the amount they typically receive is lower.

For more than 60 years – up until 2010 – women received their pensions at the age of 60, but that has been rising ever since. From now on, men and women will see their state pension age rise together, increasing to 66 by October 2020 and then to67 by 2028.

Moreover, the government has also accepted the findings of the Cridland Review, which recommended the pension age should rise further – to 68 – by 2039.

The move to increase the state pension age is the result of increasing longevity. Even though state pension ages may now be the same, men and women are still far from equal when it comes to the value of their pensions.

Figures show that in 2017 the average woman’s state pension was worth £126 a week, compared with the average man’s at £154.

That is largely because women tend to work in more lowly paid and part-time jobs and therefore pay less in national insurance contributions. Those who take time off work to have a family or to act as a carer often fail to claim national insurance credits.

In addition, last week, the Office for National Statistics said women working full-time in their 40s face a 12.8 per cent gap, while women in their 50s earn 16 per cent less, on average.

Apparently, the gender pay gap has reduced by just half a percentage point this year. When you combine part-time and full-time work, women still earn on average 17.9 per cent less than men.

That means now, women will effectively be working for free. Now where’s the fairness in that?

Marlene Outrim is managing director of Uniq Family Wealth