Women and pensions

[Gin96]

AIBU to think women are short changed when it comes to pensions? The amount of women I speak to who don’t have a private pension. A lady I work with is 67, she only has a state pension and can’t afford to retire. Ladies in there 40’s with no pension at all, they don’t think it’s a problem as the state will provide for them. Why are we not taught in school about finances and pensions? As I get nearer to retirement age I am suddenly taking an interest and it is a mind field trying to work it out.

Today 13:22 mydogisthebest

‘Well the change should either have been to 66 or 67 or, as I was originally told, 62. Not 62 then increased especially when women born in certain years suffered the most.’

I kind of agree with you, that it would have made sense just changing pensionable age to the same as men’s straight off, but you can bet your life that if there hadn’t been a stepped change, you’d have many more people complaining.

It just goes back to the point that whenever you bring in a change of policy, there are people who just miss out by being the ‘wrong side of the line.’

I do agree with the point about being allowed to work for longer, too, rather than having to stop work and claim your pension as used to be the case. There are some jobs eg heavy physical stuff where it may not be possible to work into old age but tbh nowadays there’s a greater number of jobs which are more sedentary and where it’s perfectly possible to continue working into your late 60s and 70s. People have a lot of skills and experience by this age and keeping working part time while claiming your pension can be excellent for your mental well being.

Again this is a reflection of the times. In the past statistically a man was more likely to draw his pension at 65, potter about for a few years and die in, say, early 70s. Someone drawing their pension a few years from now, at 67, then continuing to work part time for another few years, and then living til, say, mid 80s, is actually getting a far better deal financially as although they don’t get their pension til older, they have more years of being paid.

I’m really interested in the point about communication.

Personally, I feel like I have always known - I’m 44. When I started working part time during childhood then as a student the SRA was 60, but once I was in my first job post uni, that was 1997. So the 1995 legislation had been passed and equalisation was a very current topic. Plus - I have always been interested in my personal finances. If I saw an article about pensions and SRA I’d think “interesting, relevant, I’ll read that”. But just from my experience posting on MN, I am sure that there are plenty who would think “pensions? La la la - don’t understand them”. And not read it.

I’m the wrong age to have been targeted for communication - not only directly, but in 1995 I was the demographic for Cosmo, not Women’s Weekly So I can’t say how well it was advertised from personal experience.

I rely in part on FOI requests published by WASPI - so hardly unbiased! Some of what they report is pretty poor communication, in my opinion. For example, in the 2000s, letters going out to individuals giving a retirement DATE not AGE, and detailing the new SRA on page 2 of an enclosed leaflet.

Even if that had been sent in 1995... it should have come in an envelope that had “THE AGE WHEN YOU RECEIVE YOUR PENSION IS BEING DELAYED - IMPORTANT INFO INSIDE”.

And your age, not the date, should have been on red at the top of the letter.

I’m educated and interested in finance, and numerate. Ask me what year I’ll turn 67 and you’ll have to give me 5 seconds to do the mental arithmetic! I don’t think that a date would stand out to all people as being wrong. If you don’t know it’s changing from 60, why would you read that date and do your mental arithmetic to check it is your 60th year?

I am all for personal responsibility. I despair of people who say “la la la - too complicated”.

But if you know that people don’t read leaflets in full, and that some people can’t(literacy issues) why would you not make it as clear as possible? It doesn’t cost any more money to start the letter with big font capitals saying “YOU CAN’T GET A STATE PENSION UNTIL YOU ARE 64”.

This piece from LSE is interesting:
blogs.lse.ac.uk/politicsandpolicy/state-pension-age-inequalities-in-awareness/

By 2007, 80% of lower educated women were aware, compared to 92% of higher educated. So 12 years on, 1/5 women with lower educational levels were not aware of the change. Most likely, the women more likely to be hardest hit by the change and not knowing about the change. 1/5 is too high for me to think “a small number of people don’t take responsibility, tough luck”. 1/5 is a failure in government communication strategy.

I remember LOADS of TV adverts for tax credits (think there were £notes with people’s faces instead of the Queen and an “it’s your money” slogan?). They were no more relevant to me than pension adverts - but I don’t remember any of those. (to be fair, anecdotal sample of one!)

There have been LOTS of press articles in recent years. But how many at the time? And in any case - should a government be allowed to rely on a 3rd party newspaper reporting it, rather than communicating directly or via advertising themselves?

I’m genuinely interested in the communication in the 90s, with no axe to grind. As I said - when I google, the short sources are biased and I don’t really have the time right now to read high court judgements that probably detail the communication strategy.

I do think that in the current climate of frequent pension legislation and age change, you can expect people to take responsibly to find out. But if back in the 90s change was rare, I think the duty should rest more with the government.

Really interesting points there Ellisandra. Perhaps there was a particular demographic of women who needed clearer and more personalised communication, and that’s a govt failing. But I agree too, just from reading MN you can see that some women stick their fingers in their ears and go lalala at the mention of pensions, or blithely say oh my dh has a great pension, I’ll be fine!

And I’ve seen in my own workplace that some people just make really bad decisions... it’s not that they haven’t got access to the information, they know as much as everyone else yet still decide to opt out of the workplace pension.

And then there are people like the poster just now who feels it would have been fairer to just make the leap in one go to equalising pension age with men, rather than telling her she’d get her pension at 62... but then went on to say she had no other pension anyway other than the state one, so it’s not like she could have increased her contributions even if things had been communicated earlier or more clearly.

Pensions fundamentally are a case of ‘jam tomorrow’ ... it bites when you see hundreds of pounds disappearing each month in contributions and think what you could be spending it on right now! But it’s too important an issue to bury one’s head in the sand over

Yes, “what would you have done differently?” is such an interesting question!

I faced a massive change to my company pension (pay 2x more for 1/3 less, and get it 2 years later). So I started paying into a private pension to top it up and to bridge 60 to 67 as I might not want to work at 60 or may not be able to (health, economy...). Prior to this I hadn’t saved as much - preferring to over pay my mortgage and, honestly, buy shiny things But I am in a fortunate position that I have spare income currently.

If you’re relying on state pension and couldn’t afford to save more - or you are simply a jam today personality - then what really would you have done differently?

It’s bloody annoying working more years - but that’s what you have to do.

I’d be more interested in a campaign that looked at the “small stamp” married women’s reduced NI. For example, should it be assumed that this decision was made as a couple, so all divorced women and men should get 50% each of the full and reduced pension? No more cost, but fairer distribution.

Ellisandra - yes, bloody annoying in some ways to feel you just have to work longer. But in other ways it perhaps encourages people to open their eyes to seeing the world of work differently. Eg perhaps in the past I’d have been like many teachers- head down, power through til 60 (then perhaps drop dead within a year or two, or at least find the shock from full time working to enforced retirement pretty big.

Whereas now I’m at least freed up to think, right, I’ll probably work til I’m 70 but I’m damned if I’ll be standing in front of a room of teenagers by then, I’ll switch to something education-related, perhaps do some supply work, find a part time post...

I definitely think in many ways preferable to the days when one tended to stick in a job for life, then retire and go from all to nothing, work-wise. I’m not sure that’s great for mental well being. The world of work has changed massively, and it’s not all in negative ways. I like the fact that people now have more diverse working patterns over their lifetime

one thing that worries me is do you think the state pension will be means tested in the future? All the people who have worked to save and pay there mortgages off will then be penalised for it?

Really good point, Gatoadigrado, about the 'boundaries' whenever something changes.

Actually some really interesting information from both Ellisandra and Gatoadigrado. thank you.

Well as I said before, no one talked about private pensions when I was younger (at least no one I knew did). It never even crossed my mind to have one.

I was also advised in my 40's that it was not worth starting one as I would have to pay in a really large sum each month.

I could not have done anything whether the age I qualify for state pension changed once or twice but it is annoying to have had it changed twice, to know I have lost out by about £40,000 and to know someone born the year before me got theirs almost 4 years before me.

I am probably more annoyed about the bus pass to be honest. I don't drive and would love the freedom the bus pass would give me. Bus fares can work out quite expensive.

one thing that worries me is do you think the state pension will be means tested in the future I really do think it will be means tested - we have planned for it.

I think there’s another way to look at means testing state pension. Instead of seeing it as a penalty on those who were fortunate to be able to save, see it as support for those who weren’t in the same fortunate position.

I work in a big blue chip company than pays well for my skill set. My sister is run off her feet in a bar with some pretty horrible customers, she was once glassed, and she works unsociable hours. I do not work harder than her. My job is not more stressful. (I have more responsibility and a higher education in order to do it - but I’ve never been glassed)

The government is giving me a pretty impressive tax break on both my company pension and private pension. They’re not helping her out much.

We’re already in a position that people with lower state pensions get some extras - pension credit, housing benefit etc,

In my personal opinion, a completely means tested state pension will only happen if the country’s coffers actually run dry. A Greece situation. We have an ageing electorate, and older people vote. It would be party political suicide to completely means test it.

So say state pension is £8K and I have a company pension of £8K. I don’t think it’ll be means tested £1 for £1 and I’ll have my £8K company pension that I paid for and my sister will have the same for “free”.

As well as political suicide, you will stop people saving for pensions - which is a serious problem.

I could see a partial means test. She get £8K, I get £4K - so £12K in total for me. To prevent a riot and to keep people saving, I’d have to get more.

I don’t think it will be fully means tested - but as I say, I think it could be hit if we’re in a Greece type situation. So if you’re in a position to - save (or pay off mortgage to reduce outgoings). I’m trying to plan so that I can live off my own plans, and the state pension makes me much more comfortable.

Do you think it it will be in the next 10 to 15 years?

I can’t see the state pension being means tested because people would just wise up to the system and not pay into a private pension if they knew it would knock the same amount off their state pension. Or you’d end up with people playing the system and paying just enough into a private pension to avoid being penalised with their state pension.

Or of course withdrawing the whole of their private pension which people are now allowed to do, and spending it all, then qualifying for state pension

Most people pay into a private pension to top up their state one. You would have to have a very big pension pot to make it worthwhile paying into a private pension if pensions were means tested. Remember you would want to have enough to have a pension bigger than the state pension.
And well off people would just invest in houses and the like.
My pension will be about £5k per year. It will be a nice top up. But that is all.

It actually makes more sense the current situation with a basic state pension and top ups for the poorest.

I'm 37.
Never really paid into a pension.
I cared for my Nan who had cancer and died when I was almost 18. Went to Uni but also cared part time for my then disabled grandfather who I lived with. Got pregnant at 22 and had my baby. Bought my house with my now husband. I looked after my children until they went to school as childcare wasn't an option where I live.
Once they started school I started working full time as a carer relying on my grandad to have my boys for a few hours in the evening until my husband finished work.
My grandfather had dementia.
I eventually (after 1 year) had to give up my job to care for my grandfather full time as his dementia had progressed badly.
He's now in a nursing home where I now work, so only started paying into a pension recently.
Sometimes we don't have to luxury of being able to be employed due to family circumstances. When you care for an elderly relative your health deteriorates yourself and you get fuck all. No pension, no nothing. It's really hard. Then you see posts like this and realise you're fucked both ways for doing the best you could and saving the government thousands by looking after your loved one for as long as you could. I'd still have him with me now if I could but he requires specialist nursing care which I couldn't give him.

Gin96 the massive push from the govt is for people to save into their own pensions rather than relying on just state. And that’s been the case for quite some time, with the auto enrolment legislation etc so tbh I can’t see anything changing massively for a while now. Things are in place to raise the qualifying age for state pension gradually over coming years, and I’m sure that will continue, enough of course there must be a ceiling beyond which it won’t rise (70?)
By gradually increasing The qualifying age and keeping up the pressure on people to pay into their own workplace or private pension too, I think that will stabilise the situation

I also think that other things could happen to allow the government not to raise the state pension - effectively reducing it as inflation would then erode it.

So for example, some pensioners qualify for housing benefit. There is already the ‘bedroom tax’ if they are in larger properties. But you can be in a 1 bed flat. In the last 10 (?) years there’s been a massive surge in purpose built student accommodation - bed sits. Also, room only with shared kitchen. I think it would be a massive leap to force pensioners needing housing benefit into communal kitchens... but why not into contained bedsits?

I’m no expert on economics and fiscal policy, so I’m not saying that would work Someone more knowledgable might now explain a negative impact on the economy via the housing market!

So I’m saying it more to throw in that there may be other options, to make a state pension go further.

I must be weird! I qualified in my profession in 1995 and started my first job in September. By October, I had an IFA visit me at work to set up a pension, so I started paying in at 23 with a view to retiring at 50. Which isn't going to happen as I still have school age children and am nearly 50 already. But, as a result of starting so young, I have a pretty healthy pension pot already.

I have no idea why I was so sensible, other than hearing my father bemoaning that he had been given shit financial advice about my mother's NI contributions and how she was going to miss out as a result.

Spinnaret- sometimes that common sense kind of creeps in by osmosis!

As a young teacher, like many in the late 1980s, I was targeted by companies encouraging me to opt out of the teacher’s pension scheme with promises of untold riches. Some of my colleagues did opt out, and massively regret it now. Fortunately a little voice in my mind reminded me that the investments could go down as well as up, and that playing the safer game of remaining in the teacher’s pension was a better decision long term (even though i sometimes want to cry when I see hundreds being wiped off my gross pay every month!)

I don't think it's a women only thing anymore. It used to be - women were given the option to pay less NI years ago and then rely on their husbands pension. I had one Nana who did this and regretted it.

Now I think it's more a case of needing to educate everyone on the importance of a private pension and starting to pay for one as soon as possible. The state pension will never be enough to live on. The sooner we accept and understand that whether man or woman the better we will be.

I agree means testing state pensions is fraught with difficulty but at a certain level people have no sympathy and it’s at that level the benefit will disappear and no one will cry a river!

I’ve made sure to prob the junior staff on my team to make sure they have a privately pension. The youngest is 21. So has years of working ahead of her. She’s still living at home, is saving for a house deposit and has zero bills to pay. She asked about pensions a while ago and we all essentially said “just get one! And pay into it as much as you can now while you have minimal outgoings”

I don't think the state pension will be means tested, but I think the age will go up again, and it will become graduated, so maybe you start getting a 20% pension at age 70, rising 20% a year so you get the full pension at age 75.

Some families will be forced to live together by economics, rather than as widespread nuclear units.

A bit like the interesting years and years on telly.

Was anyone ever advised to move out of a final salary scheme and hasn’t done anything about it? You could be due a hell of a lot of compensation for this poor advice. I gave some guidance to a teacher who who done this following advice and they were awarded £100k by the compensation scheme as it was clearly incorrect advice. A lot of people transferred in the 90’s on very poor advice. Worth looking into.