New research by UK charity Age Concern has revealed that nearly a quarter of UK women over 60 find it very difficult to manage financially. The research further revealed that 85% of women over 60, and 60% of those under 60, admitted that taking time out of work to care for family had affected their ability to save into a pension.
The charity’s ‘Counting the cost of caring’ report warns that, although the government’s pensions bill will improve the financial future of many women, there are gaps that could leave thousands of women already in or approaching retirement facing an uncertain future.
Recent reforms make 30 years of contributions and caring sufficient to qualify for a full pension and abolish the 25% rule, so that every year of contributions counts. In the light of evidence that 17% of single female pensioners lives in poverty, however, Age Concern has called on the government to apply these changes retrospectively, so that those over state pension age at the time of the changes will also benefit.
Gordon Lishman, Age Concern’s director general, said: Older women are in danger of becoming a forgotten generation, caught up in a system that penalizes them for taking time out of work to care for their families. The charity also said that, although pensions minister James Purnell had stated that retrospective reform is the only solution to the cliff-edge for older women, the government is, as yet, showing no signs of action.
While the report revealed that there is strong female support for the proposed new system of personal accounts, with three quarters of women in favor of the scheme, Age Concern commented that the needs of women and carers must be taken into account in the design this product. The research showed 82% of women stating that the offer of a good pension scheme would encourage them to save more.
Age Concern concluded that, as lower earnings and time out of the labor market are still commonplace for many working women, the government needs to implement a scheme to reflect the needs of these women and carers to help those who are missing out under the current system.