'Women's typical sequence of paid and unpaid roles over the course of their lives limits their ability to accumulate private pensions. At the same time, the levelling effect of state pensions is being eroded.'
Dr Ginn has used British survey data to examine how women's patterns of paid and unpaid work influence their chances of building an adequate private pension of their own – and how changing patterns of partnership and parenthood influence outcomes. The research shows that:
- For the majority of women, their private pension disadvantage – and hence their risk of personal poverty in later life – is unlikely to diminish in the future. At the same time, new patterns of pension disadvantage are emerging, influenced by partnership status, parenthood, class and ethnicity.
- For example, older women who are single enjoy a private pension advantage compared with women who were ever married. Compared with married women aged over 65, the chances that a single woman will receive any private pension income are nearly 7 times higher. The chances for widows are 4 times higher but for divorced women, they are only 1.5 times higher.
- This 'single premium' is greatly reduced when comparing private pension coverage among mid-life women. It almost disappears in the youngest generation.
- The effect of motherhood in reducing full-time employment, earnings and private pension coverage is weakest for the fifth of women with a university degree. Nevertheless, having children still substantially reduces their pension-building opportunities. The earnings of women graduates with a pre-school child are on average only 44% of the earnings of childless women graduates – which has consequences for pension contributions.
- The biggest negative impact of motherhood on private pension prospects occurs for mid-skilled women, those educated to GCSE level. These comprise about one third of working age women and the proportion is rising.
- Among younger women, marriage and motherhood are diverging, with rising childlessness and childrearing outside marriage. The adverse effect that raising a family has on women's private pension coverage is magnified for lone mothers. Among women aged 20-39, divorced women's chance of having private pension coverage is less than half that of married women.
- Divorced women begin to 'catch up' on lost employment, earnings and pension-building only when their children are independent, but they remain at high risk of poverty in later life. On average, children are 4-5 years old at the time of divorce, restricting their mothers' opportunities for earning and pension-building for a number of years. For this and other reasons, legislation allowing pension-sharing at divorce is unlikely to end divorced women's pension disadvantage compared with other women and divorced men.
The research prompts questions about the value of derived pensions versus independent entitlements. It suggests that the financial security of those who have devoted time to caring for their family is better protected by some form of carer credits than by rights based on legal marital status. But such protection can only be achieved through state pensions.
International comparisons reveal that the UK has a particularly harsh pension system for women, even among 'liberal', English-speaking welfare states, as the women-friendly features of state pensions introduced by Barbara Castle have been dismantled or rendered ineffective.
Women's disadvantage in accumulating private pensions is acknowledged in the government's Green Paper, Simplicity, Security and Choice: Working and Saving for Retirement, published last December. But no change in pension policy is proposed to remedy the situation.
Dr Ginn concludes that:
'Despite women's increased participation in employment, most cannot rely on private pensions to provide an adequate personal income in later life. Only improved state pensions with protection of caring periods, or alternatively a universal citizen's pension, can ensure that women's unpaid family care work does not lead to poverty and dependency in later life.'
For further information:
Contact Dr Jay Ginn on 01483-300800 (work) or 01737-559341 (home) or email: j.ginn@surrey.ac.uk
Or Lesley Lilley, Rachel Blackford or Anna Hinds at the ESRC on 01793-413119/413126/413122
NOTES FOR EDITORS
1 The research project 'Gender, Employment and Pension Acquisition: Trends and International Comparisons' by Dr Jay Ginn was funded by the Economic and Social Research Council (ESRC).
2 Dr Ginn is a Senior Research Fellow in the Sociology Department at the Surrey University and Co-director of the Centre for Research on Ageing and Gender. She is currently working at the Netherlands Institute for Advanced Studies.
3 A new book based on this research, Gender, Pensions and the Lifecourse, is in press. Dr Ginn's previous books include Gender and Later Life (1991), Connecting Gender and Ageing (1995), both with Sara Arber, and Women, Work and Pensions (2001), with Debra Street and Sara Arber.
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