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Pensions: Gender Gap

Volume 813: debated on Tuesday 13 July 2021


Asked by

To ask Her Majesty’s Government what plans they have to narrow the gender pensions gap; and what assessment they have made of (1) the under- payments of state pensions to married women, and (2) the reduced private pension contributions associated with female work patterns, in the development of those plans.

This Government recognise the challenge of the gender pensions gap resulting from historical differences in labour market participation. Through automatic enrolment and the new state pension, we are enabling more women to build up pension provisions in their own right, reducing historical inequalities in the pensions system. We are fully committed to addressing the historical state pension errors and ensuring that the individuals affected receive the state pension they are rightfully due in law.

I thank my noble friend for her Answer but, given the gender pensions gap of 40%, which Prospect says has not improved over five years, what specific workstream is there with targets for reducing the number of women with lower state and private pensions and for publishing up-to-date numbers—including for women in multiple part-time jobs, who are excluded from the state pension and auto-enrolment and lose out in net pay schemes, category D pensions and pension credit? Secondly, can my noble friend explain why married women did not receive automatic state pension uplifts after 2008? Will she agree to meet to discuss improving women’s pensions?

My noble friend asks a number of very important questions. We are happy to meet to discuss them fully; there just is not time to do justice to them today. My noble friend also referred to people who may have several jobs that individually fall below the lower earnings limit in relation to national insurance qualifying years. Analysis of this group shows that it is not usually a working pattern that people do for many years; over an average 50-year working life, most people are still likely to build up sufficient qualifying years to maximise their state pension when they reach state pension age.

My Lords, 63% of adults in households claiming housing benefit are women. Women are the household reference person in 57% of social tenancies, and ONS figures show that those in their mid-30s to mid-40s are three times more likely to rent than 20 years ago. Given all that, many women will struggle to increase their pension savings above their current level. Will the Government consider a flat rate of tax relief on pension contributions, but set at a level above 20% so as to improve the retirement income position of low to moderate earners?

The noble Baroness brings up a very interesting point. I do not believe that we have discussed that, and it is not in our plans to deliver that, but I will take it back to the department and we will discuss it further—and I will write to the noble Baroness.

My Lords, I am grateful to my noble friend for raising this Question in the first place. There are 12.5 million state pensioners, and they require a budget of more than £100 billion a year. That burden, if we can put it that way, is projected to double over the next 20 years. This is great news for pensioners, of course, but is there not a hidden imbalance in these figures because, in future years, that burden—that huge budget—will be borne by young people rather than the elderly? So is it not right that we should look very closely at the balance in all our budgetary provisions for pensions? In particular, is it not appropriate to look at the triple lock to see whether it achieves the right balance between those who receive and those who have to provide?

My noble friend must not forget that today’s working-age people are tomorrow’s pensioners. Future generations of pensioners, not just the current ones, will benefit from this uprating approach. In the long term, if the triple lock is maintained, younger people will benefit as the value of the state pension continues to rise above the trends of earnings rates and price growth.

My Lords, divorced women face the largest gender pensions gap, so what measures will the Government take to ensure that, on divorce, pensions are split sufficiently for divorced women to receive their full entitlement to retirement income?

My Lords, to ensure that anybody is getting the correct amount of state pension, it is important that individuals report to DWP any change in their circumstances. This includes divorce, as it may affect their entitlement to the state pension. This has been the position under successive Governments of different political persuasions, who have then further made this information known in a variety of ways. I suggest that it is important to look at that information on GOV.UK.

Can my noble friend the Minister tell me what action the Government are taking to address the disproportionate lack of engagement with pension saving by women?

My Lords, it is important that all savers can easily access their pension savings, so that they can plan to retire when they want. We are introducing pension dashboards to help make accessing pensions information much easier. We are also introducing shorter, simpler pension statements to help all members of the automatic enrolment scheme engage with their pension savings.

Some 200,000 women have been underpaid their state pensions for up to 20 years. I might be one of them. I declare an interest as the proud recipient of £6.79 a week. Yet there is little movement on the part of the DWP, and I and those others cannot find out. Letters go unanswered and messages say, “Don’t contact us, we’ll contact you”. How long will it take to achieve repayment?

My Lords, the DWP is working extremely hard on making sure that these underpayments are repaid. It is putting in a new team of 360 people to work through it, and we hope that all those underpayments will be paid by the end of 2024.

My Lords, I thank the Minister for her reply, although in truth it leaves us none the wiser. Does she agree that there is a pattern here that is not simply, in her words, historical, since it is still happening, and not just through the continued discrimination against women in employment? There is also the clear failure to offer any pension to women on lower levels of pay on top of the inadequate new state pension. This pattern needs urgent attention. Governments can defer legislation that everyone agrees is necessary, but women cannot defer when they need a decent pension.

I lost some of the noble Lord’s question there. The state pension underpayment that we are talking about affects both men and women. We will have estimated costs and data in the department’s annual report and accounts, which will be published shortly. It is important that those people are paid what is owed to them and that we continue to ensure that women are getting their fair share of pensions into the future.

My Lords, as the noble Lord, Lord Davies, just said, pensioner poverty is rising up to 18%—2.1 million people—with 30% of single female pensioners living in poverty. Is it not time for what might be called a universal basic pension, set at a rate so that no pensioner is living in poverty? People who spend a lifetime contributing should surely not be left, as 8% of pensioners are, worrying that they cannot pay an unexpected bill.

My Lords, the Government have no plans to look at the basic pension. What is happening now is that people—women in particular—are beginning to build up their pension schemes, and we are doing everything we can to ensure that, within the next 10 years, they will be equal to all other pensions.

When looking at the various types of unfairness with women’s pensions that we have heard about today, will the Minister also look at the plight of those retired women who now live in countries where their UK state pensions are frozen? Is this not the greatest unfairness of all?

My Lords, this issue has come up before in this Chamber. We are looking at it, but we have no plans to change anything at this time.

My Lords, the noble Lord, Lord Dobbs, referred to the triple lock. Does the Minister agree with me that the triple lock merely enshrines the inequality in the pensions received by men and by women, which should be reason enough to examine it again?

No, I do not agree with the noble Baroness. We are committed to ensuring that older people are able to live with the dignity and respect that they deserve. The state pension is the foundation of the support for older people. As a result, the triple lock and the full yearly basic state pension is now £2,000 higher than it was in 2010. It is important that we consider that every year and ensure that we keep that fairness for both pensioners and taxpayers.