Research reveals the majority of women can't afford to save for retirement

Research has revealed that the number of women saving enough for their retirement has reached a seven year high. The Scottish Widows Women and Pensions Report 2011 has found that 50% of women are now saving adequately for their retirement, up from 43% in 2010. It’s not all good news though as the research also shows that more women are saving nothing at all towards their retirement, 23% compared with 17% of men. Furthermore, 71% of women say they can't afford to save long term compared to 60% of men.

The report found that when women do save, they tend to save a higher percentage of their income than men. However, the gender pay gap means that women’s earnings are lower which in turn means that the average monetary amount saved by a woman is significantly less than that of a man.

There are now more than a million women unemployed in the UK, the highest level since 1992. At the same time, there are fewer jobs, notably in the public sector, which is currently translating national spending cuts into local budget reductions.  Public sector employers are more likely than the private sector to offer flexible working opportunities which enable women to combine work with caring responsibilities. Consequently, more women may be forced into looking for part-time work which is typically low-paid and low-skill.

Further attacks on women’s incomes come in the form of rising childcare costs, a cut in childcare subsidies, and fewer childcare places. In Scotland, the average annual cost for 25 hours of nursery care per week for a child under two is £5,178. The cost of a childminder for a child aged two and over in Scotland increased by 8.3 per cent almost four times as much as the average wage.

Given the impact that such changes have on women's incomes, it’s little wonder then that the majority of women can't afford to save long term.

High cost of childcare forces women back in the home

Government pushes ahead with plans to raise state pension age for women

Government U-turn on women’s pension age but millions still to lose out

The UK coalition government has announced that it is to delay the planned increase in state pension age to 66 until October 2020.

The government had planned to accelerate the raising of the state pension age for women from 60 to 65 in 2018, two years earlier than previously planned. The changes announced yesterday mean that the maximum amount of women will have is now 18 months instead of two years.  Although the move will benefit 245,000 women, 2.3 million women across the UK will still lose out as they struggle to make alternative plans for their retirement on very little notice.   

Many of the women affected, who are currently in their late 50s, are already seriously disadvantaged when it comes to pensions, especially those who work part-time. Most of the women will have earned less over their lifetime, have less savings, and less of a pension than men of the equivalent age. Many of the women will also have had interrupted careers due to taking time out to care for children, which means they will have vast holes in their pension pots. Many will also not have had access to company pension schemes. 

High cost of childcare forces women back in the home

The latest government statistics have revealed that an increasing number of women are being forced to give up their jobs because of the high cost of childcare.  The number of women who have given up paid employment to stay at home and look after their children has risen by 32,000 in the past year.  The average cost of full-time childcare is £385 a month but this rises to £729 for children under the age of two.

Women are already penalised when they take time out of the labour market to have children. A lack of flexible working and a dearth of quality part-time jobs mean that, after they have children, women are very often forced to work in jobs that are well below their skill levels. Even when both parents are in full-time employment, women are still usually considered to be the main caregiver.  When the cost of childcare becomes prohibitively expensive, it is, therefore, unsurprising that it is the woman who has to give up her job to take care of the children.*   

With the increasing cost of childcare and the impact of this on parents, it seems that greater public investment in childcare is desperately needed. Increased provison of childcare, free at the point of use, would go some way towards rebalancing the inequality women face when trying to combine a career with parenthood.  

*This refers to mixed sex relationships. There is little evidence about the dynamic of childcare in same sex relationships.   

Government pushes ahead with plans to raise state pension age for women

The UK coalition government has won a vote in the House of Commons to take forward plans to raise the state pension age for women. 500,000 women will now have to wait 18 months to two years longer than they expected before they can collect their state pension, costing them up to £15,000 each.

The equalisation of the state pension between men and women will now be accelerated with women’s retirement age rising from 60 to 65 in 2018, two years earlier than previous plans. The retirement age will then rise to 66 for both men and women in 2020.

Many of the women affected, who are currently in their mid to late 50s, are already seriously disadvantaged when it comes to pensions, especially those who work part-time. Most of the women will have earned less over their lifetime, have less savings, and less of a pension than men of the equivalent age. Many of the women will also have had interrupted careers due to taking time out to care for children, which means they will have vast holes in their pension pots. Many will also not have had access to company pension schemes.  On top of this, these women have now been given very little notice to make alternative plans for their retirement.

More than 170 MPs have now signed a Commons motion calling for a rethink over the plans, including both Conservative and Liberal Democrat backbenchers.