Pensions and Women: What are the main parties saying?
Date Posted: Thursday 5th December 2019
In the light of Brexit and broader ideological debates, pensions do not feature particularly heavily in the 2019 election manifestos from the four main parties. Looking across the manifestos however, some themes emerge:
Commitments to existing pensioners are held and the Conservative, Labour and Liberal Democrat parties each promise to maintain the ‘triple lock’ which was introduced by the Coalition Government in 2011. The triple lock protects the real value of the state single tiered pension (STP) as it commits Government raising the STP by either the rate of inflation, average earnings or 2.5% whichever is greater. The Green Party do not expressly advocate the triple lock and instead provide alternative proposals for Universal Basic Income (UBI) with an additional supplement for pensioners which would see all pensioners receive a payment of £178 per week with additional benefits paid to those with disabilities or housing needs.
1950s born women
The Labour Party, Liberal Democrats and Green Party make reference to 1950s born women for whom the timetable for State Pension Age (SPA) increases was accelerated. The Coalition Government’s rationale for the acceleration in 2011 was ‘fiscal sustainability’ and a desire to reduce the overall number of people in retirement however it was highlighted at the time that the changes would disproportionately impact some women who had expected to retire at age 60 and would now have to work until age 65 and campaign groups including Women Against State Pension Inequality (WASPI) were established to lobby for a slower transition.
The Green Party prioritise 1950s born women to be the first recipients of Universal Basic Income (UBI) while the Liberal Democrats promise “proper compensation” although they lack further detail of who this might be applied to or the levels of compensation that might be awarded preferring to delegate this to the parliamentary ombudsman.
Within their manifesto (further promises to compensate all 1950s born women were made subsequently) the Labour Party pledge to work with 1950s born women to design a suitable compensation system and they further promise to introduce legislation to prevent retrospective changes to be made to state pension commitments. Further Labour Party pension changes that would affect women include curtailing the rise in State Pension Age to 66 for everyone and reviewing the retirement ages for ‘physically arduous and stressful occupations, including shift workers, in the public and private sectors’.
From 2012 employers have been compelled to auto enrol employees into occupational pension schemes. The Labour Party manifesto sees this as a positive development and look to further widen access for more low-income and self-employed workers. They also recommend an independent Pensions’ Commission, modelled on the Low Pay Commission, to recommend target levels for workplace pensions. The Liberal Democrats do not address auto enrolment directly but do refer to the inequalities faced by same sex couples in accessing equal pension rights.
The Green Party propose a departure from earnings linked pensions promising a flat rate provision and an end to ‘double taxation’ of pension funds whereby Corporation Tax is applied to the fund and then Income Tax is applied to payments made to individual pensioners.
Tax Relief Review
The Conservative party focus on reviewing a particular anomaly which they claim disproportionally affects women whereby employees who should receive tax relief on their pension regardless of whether they pay income tax, are unable to claim back tax relief under net pay scheme rules. This particularly affects low paid workers earning less than £12,500 but over £10,000 who would pay no income tax or tax relief on their pension if their employer uses a net pay scheme.
A gendered pensions landscape?
So what do all of these proposals mean for women? In truth with most parties committing to ‘review’ arrangements it is difficult to quantify the actual impacts or discern who exactly the changes will be applied to. This ambiguity adds to an already opaque pensions landscape which many find inaccessible. That all of the manifestos make some reference to women and pensions in part reflects the gendered history of British pensions policy and the detrimental impacts that many pension policy changes have had on women. There are specific attempts at redress for some historical oversights however none of the parties address the ongoing gendered nature of the UK pensions landscape which sees women financially worse off on average than their male counterparts regardless of socio-economic background or marital status. If we might call for one change gender pensions gap reporting would be it. There has been widespread recognition of the gender pay gap and yet recognition of the gender pensions gap is barely acknowledged. At a minimum gender pension gap reporting would start to quantify the financial inequalities that are translated into women’s retirement. Looking ahead, this is shortfall needs to be urgently addressed if we are to improve the pensions prospects for future generations.