Women get new pensions deal
Women are set to get a better deal on pensions under new plans from the Government. Andrew Partridge reports
Work and Pensions Secretary John Hutton has revealed that the Government plans to “end injustice” for women in its reforms to the UK’s pensions system.
Under the Government’s new proposals, put forward by John Hutton at a speech to the left-wing think tank, the Fabian Society, women would be given enhanced national insurance credits. This would mean that they’d have to work for fewer years to gain a full State pension.
Under the current system, women taking career breaks to have or to bring up children, or to care for a relative, lose out as the breaks they have taken can mean that they have not worked long enough to claim full pensions benefits.
However, under the changes proposed by John Hutton, an extra 270,000 women would be entitled to full pensions benefits from 2020.
The Work and Pensions Secretary said the new measures would provide: “A new contributory principle that gives women a fairer entitlement to the basic State pension more quickly, while ensuring that we value social contributions equally with cash contributions and move progressively away from a system predicated on a 19th century view of both working lives and social relationships.”
However, the proposals to improve the lot of women differ from those put forward by the Pensions Commission, headed by Lord Turner. These proposed that pensions should be paid on residency – how long people had lived in the country.
Yet Hutton claimed this would have been too slow in improving the situation for women over 45, and he claimed the Government could not ignore this group.
Attendants at the Fabian Society conference agreed that progress was needed on women’s pensions.
Ian Naismith, Head of Pensions Market Development at Scottish Widows said: “The fact that women have a multitude of roles throughout their adult lives – some of which are likely to take them outside paid employment – is not at present fairly reflected in how we, as a nation, expect the individual to go about building pension assets.
“When you have a pensions system that overlooks the needs of women, it should come as no surprise to find so many women living on low incomes in retirement.”
It is expected that the Government will unveil the rest of its proposals to reform the state pensions system next week. It has already indicated that the state pension age will rise to 68, and that the link between pensions and earnings will be restored.