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The Government risks leaving
thousands of older women financially stranded unless it introduces state pension
reform retrospectively, according to Age Concern.
New findings, published
today in Age Concern’s new report ‘Counting the cost of caring’,
reveal that nearly a quarter of women over 60 who took part in Age Concern’s
online survey1 find it very difficult to manage financially, with around a half
saying they manage but have to be careful. 85% of women over 60 – and
60% of those under the age of 60 – admitted that taking time out of work
to care had affected their ability to save into a pension.
The report recognises that
the Pensions Bill, now in its last days of Committee stage before entering the
House of Commons for further debate, goes a long way to improving the financial
future of many women. But Age Concern is warning that there are some serious
gaps in the Bill, which could leave thousands of women who are already in or
approaching retirement facing an uncertain future.
The charity is also calling
for changes to the state pension system to be introduced retrospectively so
that older women can also benefit from changes to the number of years needed
to build up a full state pension. Yet despite admitting that retrospective reform
is “the only solution to the cliff-edge” for older women, the Government
is showing no signs of taking action.2
Gordon Lishman, Age Concern’s
Director General, said:
“Older women are in
danger of becoming a forgotten generation, caught up in a system that penalises
them for taking time out of work to care for their families.
“We have long-campaigned
for a fair and flexible pensions system that reflects the needs of women and
carers, and the proposals in the Pensions Bill are extremely welcome. But the
Government must not ignore the plight of today’s older women and carers.
Changes to the number of years needed to build up a full state pension must
also be introduced retrospectively to help those who have already retired with
incomplete National Insurance records.”
Age Concern also wants to
see much greater investment in good quality, timely financial information to
help women make informed decisions about saving. The charity’s survey
found that women of all ages are concerned about the lack of information and
advice about pensions at appropriate times in their life.
However, the report does
reveal that there is strong female support for the proposed new system of personal
accounts, which bodes well for the Government’s plans for private pensions
saving. Three-quarters of women questioned by the charity are in favour of personal
accounts, with 82% saying the offer of a good pension scheme would encourage
them to save more. As lower earnings and time out of the labour market are still
commonplace for many working women, the charity is calling for the design of
the scheme to reflect the needs of these women and carers so it genuinely helps
those who are missing out under the current system.
Age Concern’s
key recommendations
· Reforms to make
30 years of contributions and caring sufficient to qualify for a full pension
and the abolition of the 25% rule (so that every year of contributions counts)
should be applied retrospectively so that those over State Pension Age at the
time of the changes benefit.
· The new carer’s
credit should cover all those caring for more than 20 hours a week.
· Those now approaching
State Pension Age should have the opportunity to build up entitlement to State
Second Pension (S2P) more quickly through carer’s credit.
· Carers, and the
ill or disabled people they care for, should have better information about available
benefits to improve their current income and protect their future pensions.
· The needs of women
and carers must be taken into account in the design of personal accounts.
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