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Women workers are losing thousands of pounds in retirement, new figures show

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Issue 2629
Women protesting at attacks on pensions during Philip Hammonds budget speech
Women protesting at attacks on pensions during Philip Hammond’s budget speech (Pic: Joanna Cherry/Twitter)

Women will receive thousands of pounds less a year in retirement – on top of facing a longer wait before they can claim their state pension.

New analysis of official data on British household incomes suggests the gap between men and women’s pension income is nearly 40 percent.

The figure is twice that of the gender pay gap.

In the next few weeks the age at which women can claim their state pension equalises with men’s at 65.

Women’s pension age has gradually risen since 2010, when it was 60. Tory chancellor Ken Clarke announced in his 1993 budget that the women’s pension age would be brought into line with men’s at 65 by 2020.

This deadline was later brought forward to 2018.

Women Against State Pension Inequality campaign supporters interrupted Philip Hammond’s budget speech this week.

If the government wanted equality, it could have reduced men’s pension age. Instead it betrayed promises made to women in their 50s about when their pensions would be due.

The injustice is intensified by how much less women receive when they retire.

The new study by the Prospect union considered all retirement income sources, including state, personal and workplace pensions. It concluded that pension income for female retirees was 39.5 percent lower than for men, or around £7,000.

“These figures reveal the shocking scale of the gender pension gap and demonstrate the need for urgent action,” said Sue Ferns, deputy general secretary of Prospect.

The Prospect analysis is the latest of a series of studies highlighting a continuing gulf in pension outcomes between men and women.

Which?, the consumer group, last year found that women received £126.45 a week on average in state pension, a fifth less than the £153.99 average for male pensioners.


Last month pension firm Zurich found men under the age of 35 on average receiving £217 more in employer pension contributions a year than women of the same age.

There are two main reasons why women’s pensions are lower. First, because women are on average paid less than men their workplace pensions are less—or they are entirely excluded.

The TUC in 2016 estimated that up to three million women workers weren’t enrolled into a workplace pension as they didn’t meet minimum earnings criteria. These include part time cleaners and carers.

And many pensions systems discriminate against those who have “gaps” in their paid work history due to caring for children and other relatives. This work is still largely done by women.

Changes to child benefit in 2013 are also putting a generation of new mothers at risk of losing thousands of pounds in state pension.

Any person not in paid work who cares for a child under 12 is eligible for national insurance credits to help build their state pension record. This is to make up for the fact that they aren’t making national insurance contributions.

Registering for child benefit means that these credits can be clocked up. But the numbers registering has dropped significantly since means testing of the benefit was introduced in 2013.

“Many women would never guess that by opting out of receiving child benefit they risk doing serious damage to their state pension provision,” said Helen Morrissey, of Royal London, the pension firm.

“Yet the most recent figures show that this is exactly what is happening.”

Most bosses can retire from their “work” at 60 – if not before. Working class women and men should be able to do so too – and the state pension needs to be much higher for all.

Pensions – changing for the worse

  • From December 2018 the state pension age for both men and women will start to increase to reach 66 by October 2020.
  • If you were born after 6 April 1960 your pension age will be between 66 and 67.
  • In the 5 December 2013 Autumn Statement, the chancellor announced that the government believes that the pension age should rise to 68 by the mid-2030s, and 69 by the late 2040s. It has not legislated for this, but official tables are already reflecting these ages as indicative and “showing a general direction of travel for future changes”.

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