My Lords, this Government recognise the challenge of the gender pensions gap, primarily resulting from labour market participation differences. We are working with employers and partners on ways to address this, including by promoting women’s progression in workplaces and introducing shared parental leave and mandatory gender pay gap reporting. Automatic enrolment and the new state pension are enabling more women to build up pension provision in their own right, reducing historic inequalities in the pension system.
My Lords, I thank the Minister for her reply and the Government’s recognition of the seriousness of the pensions gap. However, she must also know that her reply was insufficient in tackling this problem. The problem of the pensions gap is multifaceted: it is double the gap in pay—so, clearly, there are many issues involved here. Will the Minister agree that, to a significant extent, it is a carers’ pensions gap, and that any solution must involve better pensions for unpaid carers? The only solution to that will involve action by the Government directly to provide pensions for carers.
I can respond to the noble Lord: where carers are working, they will be automatically enrolled, if eligible, into a workplace pension. If they earn below £6,240, they can still ask to be enrolled into the scheme, even though they are not automatically put into it. We have committed to remove the lower earnings limit; that benefits lower earners, including carers, working part-time. In addition to carer’s credit, there is a wide range of national insurance credits available to help people maximise their state pension.
My Lords, the Minister said that she wanted women to progress in the workplace, but she must know that one of the biggest inhibitors to women progressing in the workplace is taking time out—as has been mentioned—to care for children, families and, in later life, elderly relations. Can she more specifically say what policies the Government are introducing to address this gap: the disadvantage of women who are having to take time out? Will the Government look at recommendations from experts, such as an additional state pension credit for those who are not working because they are looking after children under 12, and measures for affordable childcare to be more widely available so that women who are trying to work can do so? Currently, the cost of childcare is prohibitive for so many women returning to work.
I think that the whole House will agree with the noble Baroness about childcare. There is work going on, first, to ensure that people are claiming what they are due and are receiving the help they should for childcare. However, that does not deal with the problem as it stands. So I can tell the noble Baroness that the Government are looking really carefully at childcare and are working with employers to see what they can do on flexible working to ensure that women can take their rightful place in the workforce.
My Lords, the Minister’s reply reveals a disappointing tolerance of carers’ inequality. Caring is an economic activity, resulting in millions of women having to take periods out of the workforce, work fewer hours and receive lower pay. They are excluded from auto-enrolment into a workplace pension. They pay the penalty of lower pensioner income on a lifetime. When will the Government restore the principle that existed prior to 2016 so that carers are credited with benefits into the second-tier pension? The Government can do that tomorrow if they wish and restore the principle that existed prior to 2016.
Carer’s credit is a national insurance credit available to people who provide care for one or more individuals for at least 20 hours a week. It can help individuals gain qualifying years that count towards the new state pension. Under new state pension reforms, carer’s credit has equal value to that of someone who pays national insurance contributions. In addition to carer’s credit, as I have already said, there is a wide range of other national insurance credits available to help people maximise their state pension entitlement.
My Lords, does my noble friend agree that there is a particular problem in this area with the situation for women on divorce? Although the Government have introduced pension sharing orders for divorce, do they have a figure for how many or what proportion of divorcing couples actually share the pension? Many men will say to their partner, “Oh, my pension is not worth terribly much”; it is then ignored and solicitors do not always get involved or advise women. Will my noble friend join me in commending the MoneyHelper service, Pension Wise, which has just established a helpline for women on divorce and encourage take-up?
Pension sharing on divorce is an option that can help women when their marriage or civil partnership breaks down. It enables part or all of a person’s pension to be transferred from the former spouse as part of a settlement. This can help couples divide what might be one of their largest assets. I fully take on board my noble friend’s point about the extra effort to make sure that women—and, indeed, men—know about the helpline. To ensure that divorcing couples are aware of that option, the Government are looking to improve signposting to information about pension sharing on divorce when implementing the reforms to divorce law.
My Lords, to get a sense of scale, I wonder whether the Minister has read the 2019 report from the Pension Policy Institute. It found that, by the time they got to their early 60s, women’s median private pension worth was a third of what it was for men. Given that women tend to live longer than men, that is a massive problem. It means that they are going to be poor in retirement. There have been lots of different reasons but the report found that key drivers were women taking time out of the labour market, as has been mentioned, caring for older relatives and children. If the things that the Minister describes were working, we would not have this problem, would we? What is the Government’s plan to put it right?
In relation to the point that many noble Lords have made about the time women have out of the workplace, I have outlined national insurance credits. In terms of the specifics that the Government are doing, I will need to write to the noble Baroness because I am not fully up to date on them.
My Lords, would my noble friend like to remind the House that pensions are not provided for by any fund and come out of taxation? The fact that the Government have been able to increase the pension by the rate of inflation as from September is to their enormous credit. It is an enormous bill and the Government cannot do everything.
I completely agree that the Government cannot do everything. It just is not possible. The triple lock is being restored for the rest of the Parliament and I think that, in the circumstances we are in, the Government have done a fine job on that.
My Lords, under the pretence of equality, the state pension age for women has increased from 60 to 66 but women continue to receive a lower state pension than men. Can the Minister explain why women continue to be treated as second-class citizens? When will the Government give them pension equality?