Increasing the State Pension age without addressing women’s caring responsibilities and unequal access to private pensions risks deepening gender inequality and pensioner poverty, the Women’s Budget Group (WBG) warned MPs today.

Giving evidence to the House of Commons Work and Pensions Committee ahead of the scheduled increase in the State Pension age in April, Dr Daniella Jenkins, incoming Director of the Women’s Budget Group, cautioned that the current pensions system is dysfunctional because it does not work for the majority of pensioners, who are women. 

During her testimony, Dr Jenkins pointed to the growing mismatch between extended working lives, unpaid caring responsibilities and pension adequacy. 

She pointed to the inequalities that are baked into the current pensions system, and the disproportionate impact on women. She explained how women make up the majority of those at pension age and above, and of those pensioners living in poverty, 57% are women. There’s a gender pension gap at every age cohort; this is not an issue that only affects older women; this is not an issue that will go away over time without intervention, she emphasized.

To coincide with the Committee session, the Women’s Budget Group has today published a new briefing on Women and Pensions in the UK.

Dr Daniella Jenkins, incoming Director at WBG said, “The UK has the second worst gender pensions gap in the OECD. We know that there are aspects in the design of our pensions system that are creating this gap. WBG analysis showed that on average, men hold nearly £67,000 more in private pension wealth than women. That’s a staggering gap of 43%. Now they are being asked to work longer in a system stacked against them.

“It’s not that there isn’t enough money in the private pensions system. There are over £3.6 trillion of assets under management, there should be no reason why people are retiring without enough in old age. What we are looking at is a fairness issue. Systems that are fairer overall serve women better, too. 

“Any meaningful reform must look to make the pensions system more progressive. That means looking at low paid workers’ employers contributing to private pensions before they do; it means staggering the thresholds for access to pension credits including for unpaid carers; and it means changing the pension tax reliefs that benefit high earners twice over and costs the Government £49 billion a year. That money could be used to support the lower paid and the predominantly female population doing the lion’s share of unpaid care and domestic work at the cost of their own incomes and savings. Without reform, inequalities built up over a lifetime of low pay and unpaid care will continue to be carried through into poverty in retirement.”

The UK Women’s Budget Group is the UK’s leading feminist economics think tank, providing evidence and analysis on women’s economic position and proposing policy alternatives for a gender-equal economy. WBG acts as a link between academia, the women’s voluntary sector and progressive economic think tanks.

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