Pensions expert Ros Altmann reveals a significant proportion of older women live in poverty, partly because they were disadvantaged in pension provision.
Women in general, and older women in particular, have been at a significant disadvantage when it comes to building up a private pension income. Having had lower lifetime earnings than men or than younger women, they had less opportunity to save in private pensions.
Older women typically spent more years at home caring for children, and were lower paid if they worked, while occupational and private pensions have historically discriminated against women. For example, it used to be legal for employers to require women to leave the scheme as soon as they married and part-time workers were excluded.
Unfortunately, however, the state pension system has also discriminated against women – particularly older women.
Many older women live in poverty because they were disadvantaged in pension provision, writes Ros Altmann
Although, over the years, the relative disadvantages for women have slowly been ameliorated, it is the youngest women who will have benefited most from the changes.
As an example, many older women were encouraged to pay what was called ‘married women’s stamp’ when they were working, which involved paying lower National Insurance contributions but also meant giving up their state pension rights. They did not realise the implications and, with no state pension entitlement, they can only claim a pension on their husband’s National Insurance (NI).
Compounding this problem of old age female poverty is that increasing numbers of older women are single and have no partner’s income to rely on. Women’s life expectancy is longer than men’s and women tend to be younger than their husbands, so they are often left widowed at the end of their lives.
Furthermore, there has been a steady decline in marriage and an increase in divorce among older couples, leaving increasing numbers of single older women.
Some changes have been introduced, such as the ability to arrange pension sharing on divorce, but the oldest women are least likely to have been able to take advantage of that.
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