In the wake of increased cases of mis-sold pension claims, both women and men will benefit from their state pensions for the very first time in seven decades. Many UK citizens have hailed the new move as both positive and sensible. For all men and women who will have attained age 65 by Dec 5, they will receive their state pension. However, after the due date, the pension age will increase to ages 66 and 67. The main problem is that the over 2 decades between pension equalisation arrangements being realised and announced, only minimal communication was provided to men and women whose retirement age would change.
Most people are concerned about the underlying financial implications. The main crusaders including “WASPI-Women Against State Pension Inequality” group have filed compensation claims for failure to provide women with an informed decision made by successive governments regarding how and when to strike a perfect balance about the retirement age. The rapid increase of the women pension age has affected many groups of females as they struggle to save more money, especially those born in 1953.
Based on when one was born in 1953, the age a woman received state pension is likely to vary to a maximum of 21 months. The significant financial difference is a great challenge to many women facing various financial constraints. The group raising the complaints is just a small, representation of thousands of UK women facing the same financial constraints. The historical gap in the state pension age has not made a remarkable breakthrough in addressing the women’s pensions.
Mercer, a major pension consultancy firm in Europe affirms that gender-pay gap stands at 16%, but the knock-on effects on the retirement savings translate to a 40% pension gender gap. Sarah Pennells, the founder of SavvyWoman.co.UK, a reputed finance website observes that even if women had been given a notice of 15 years concerning the increase of state pension that could only have helped a small group who can make extra savings to create a remarkable difference.
Maike Currie, a director from Fidelity International pointed out that the pension program can only be equated if workers adhere to the working pattern from 20 years to retirement. Currie observes that women usually have unstable careers forcing them to work flexibly or be self-employed in their working life as they struggle with childbearing and care or even take a break from their careers to care for the veterans or sick relatives. The same factors also affect men, but they enjoy a slightly higher pot compared to their female counterparts.
According to a recent Cridland report that explored the increased cases of the gender gap and mis-sold pension claims, women get 25% less income in their first year of retirement compared to men. A section of British workers believe that eradicating the gender gap through equalisation of the state pension would have positive results but such change will only help to escalate the gender pension difference.
By the time females attain age 50, they usually have 50% (£56,000) of the private pensions that their male counterparts have. Therefore, they have to pay an additional £360 each month until reaching the retirement age even after attaining age 50. Even a woman aged 30 needs to contribute an additional £21 each month to close the difference on their male counterparts. The funniest thing is that 50% of women are not sure whether they will retire honourably compared to just 33% of men.
According to Steven Cameron, an executive from Aegon, there is a need to address other issues that limit the ability of women to save appropriately for the retirement like taking care for the elderly parents or taking work breaks to raise children. UK women hope that the government will address the gender gap in the state pension scheme and other mis-sold pension issues affecting the UK workforce.