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Women to miss out under new pension rules

Published on 12 February 2014 12:01 AM

New figures from Age UK show strong opposition to changes in the state pension system which will leave tens of thousands of women missing out in retirement.


8 out of 10 older people (79%) oppose a proposed change that will leave 30,000 women reaching State Pension Age between 2016-2020 out of pocket in retirement.

The Pensions Bill, currently being debated in the House of Lords, is proposing a new single-tier State Pension for people reaching State Pension Age on or after 6 April 2016.

Age UK has revealed the findings to highlight its call for the Government to amend the current Pensions Bill and protect those approaching retirement.

Although changes to the pension system will be beneficial for many women across the country, some will lose out.

The new single-tier pension will be an individual entitlement with no allowances for those who are married, bereaved or divorced - unlike the current system which allows people who are, or who have been, married or in a civil partnership, to use their partner's record to receive a State Pension or to increase the amount they receive on their own record.

Although some transitional arrangements will be in place when the new pension comes in 2016, they are still expected to leave tens of thousands of women, and some men, with a lower pension than expected.

Over half say the change is unfair

Of those people surveyed for Age UK, well over half (57%) believe this change is unfair and that people should be able to claim on their partner's contribution record if their own falls short of giving them a full State Pension.

One-fifth (22%) believe that people should rely on their own contributions but that the Government must give people enough notice of the changes so that they can properly plan for their future.

Only around 1 in 10 (9%) agree with the change - believing it's only fair that the state pension is based on the individual's full National Insurance Contribution record and that it's right that the change should be implemented quickly.

Caroline Abrahams, Charity Director at Age UK, said: 'The aim of this reform is to introduce a fairer state pension yet it cannot be fair to change the rules without giving people enough time to also change their retirement plans.

'Many of those affected will have made life choices and planned their retirement finances carefully with their partner only to find them in disarray if there is insufficient transitional protection in place.

'We are urging the Government to correct this injustice so tens of thousands of women can receive the pension they expected, giving them precious financial security in later life.'

Women tend to have lower state and private pension rights - around 2 out of 5 women aged 55-64 have no private pension wealth compared to around 1 in 5 men of the same age, and those women that do have private pensions tend to have much lower amounts.

Age UK supports the principle of women building up their own pension rights, but the organisation argues that people need enough time to adjust to any pension changes.

Some women do not have a full National Insurance record because of years when it was difficult to work due to ill health or caring responsibilities. Or they may have worked for many years but in low-paid jobs or voluntary roles.

However as a couple, they may have planned their retirement income in the expectation that the woman will receive the married woman's pension or a full basic pension if widowed. For those approaching State Pension Age it will often be too late to change these plans.

People should have over '10 years of notice'

This view is further supported by Age UK's new research which shows that 3 in 5 of those who expressed an opinion (58%) believe the Government should give over 10 years of notice of such a significant change in policy, with 2 in 5 (38%) stating that the government should give more than 20 years notice.

For more information about the new single-tier pension and how it could affect individuals who expect to receive a state pension based on their partner's contributions, please call Age UK Advice on 0800 169 65 65 or download our policy briefing:

Visit the Age UK blog to find out how women are missing out under the new pensions rules.

Briefing on changes to single-tier State Pension (PDF 248 KB)

Visit our Policy section for the latest briefings on changes to the State Pension.

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Last updated: Dec 05 2018

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