Gender pension gap becomes an election issue

One of the key standouts in the last week of manifestos has been that the Labour and Conservative parties have both made women’s pensions a campaigning issue.

The Labour Party have already shown past form when it comes to WASPI women – back in 2017, their manifesto had also pledged to recompense those affected by the levelling of the state pension age. It stems from the fact that before 2010 women received the state pension at 60, but since then it has increased to bring men and women’s state pension ages into line. The state pension age for both sexes is now 65, but will increase to 67 by 2028.

The Conservative manifesto, meanwhile, says they will look again at a pension policy that has limited how much tax relief low earners receive on pensions savings – a quirk that is said to affect a disproportionate number of women. 

Rebecca O’Keeffe, Head of Investment, interactive investor, says: “It’s noteworthy and welcome to see pensions becoming a manifesto issue for both the Conservative and Labour parties, although neither proposals will touch the sides when it comes to addressing the overall gender pension gap.

“Our Great British Retirement Survey of 10,000 consumers highlighted the desperate need to address the gender pensions gap: while less than a third of men (30%) are confident they will be able to maintain their standard of living when they retire, this compares to even fewer women – just 17%. Men are almost twice as likely to work into retirement for the enjoyment of it than women, and women are more than twice as likely to work into retirement because of financial necessity.”

On Labour’s pledge to recompense WASPI women, Rebecca O’Keeffe says:

“This may bring at least some hope for those affected by the levelling of the state pension age, one month on since a judicial review deemed that the decision to increase the state pension age for women was not discriminatory.

“The question of how this might be paid for is a much more complex and difficult issue, but it is impossible not to have anything but huge sympathy for those affected. Retirement planning takes a working lifetime and the levelling of the state pension age shows that even the best laid plans can be left in tatters due to pension policy changes. We have some devastating verbatims from our interactive investor Great British Retirement Survey of 10,000 consumers.”

Comments on the levelling of the state pension age from the interactive investor Great British Retirement Survey:

 “I regret that the Government did not tell me it was increasing the state pension age. Now all my retirement savings go on day-to-day expenses. I have a small occupational pension but many women are really impoverished because of these changes. If I had known I would have extended my critical illness plan, and because it finished at age 60 that went at the same time as my state pension. I planned to have a reasonable standard of living in retirement. That has all gone now.”

(Survey participant 200, non-retired)

“…thousands of women have been left in poverty because of Government greed and incompetence. No, I do not have any spare money for fun things and treats. We are only just able to pay our bills and eat. Am I enjoying the retirement I planned and looked forward to? Not at all. It is stress all the way and my health is suffering.”

(Survey participant 9,487 retired)

“The Government changing the retirement age for my wife to 66 has affected us drastically. There is not enough time to readjust our finances.”

(Survey participant 7,695, retired)

On the Conservative proposals on tax relief for low earners, Rebecca O’Keeffe adds: “We welcome the proposals to look again at a pension policy that limits how much tax relief low earners can receive on pensions savings – a change to this could have a huge impact on low earners, a disproportionate number of whom are likely to be women. 

“We’d also like to see the £10,000 earnings threshold, which currently applies only to a single employer, broadened to bring into scope those with multiple jobs. Research conducted by Citizens Advice in 2017 found that more than 100,000 workers in this position were frozen out of auto enrolment as a result. Most of these (72,000) were women who may work several part-time jobs to help them manage commitments such as childcare.”