State pensions and women

Women have been second class citizens for some time when it comes to pensions. Those aren't my words (although I agree with the sentiment) it's what the Pensions Minister Steve Webb said last week at the House of Lords when he was speaking at the launch of a report about women and pensions.

If a flat rate basic state pension is introduced it will be a huge improvement for both men and women - but especially women - in the future. Last year only 45% of women who reached state pension age received the full basic state pension (currently worth £97.65 a week).

The fact is that even after changes introduced by the previous government in April it will be 2025 before 90% of women qualify for a full basic state pension. I know that there are means tested benefits such as the pension credit which top up pensions for those on the lowest incomes, but they're not really the answer.

Introducing a flat rate pension of around £140 a week - which is the figure the government is rumoured to be thinking of - is not without its problems. The main one is whether or not it's affordable but there are others as well, such as how do you 'sell' the idea of paying National Insurance if you don't get an obvious benefit from it?

As soon as you make changes there will always be winners and losers and while it's not a reason to leave things as they are, I do feel for women who are caught up in the current increase in the state pension age and who have had little or no time to prepare. Although the rise in state pension age from 60 to 65, which is currently being implemented, was announced some time ago it didn't get a huge amount of publicity. I know from feedback I've received to the website that many women were caught out by the fact that they wouldn't get their state pension at 60.

We may be able to understand - from a mathematical point of view - that the state pension age has to rise once again. It's one of the less welcome consequences of the 'good news' story of our increased longevity. What's harder to accept is that women born in the mid 1950s (after April 6th 1953) will have had their state pension age increased twice by successive governments.

And while £140 a week is definitely better than £97 a week and even better news if you have a patchy National Insurance record, it means some women - and men - will have to find £5,000 a year if they want to retire before they qualify for their state pension. If they can't find the money, they're likely to face the prospect of working later than they'd planned. Assuming - of course - they're able to find a job.