State pension age equality ‘could make women’s financial disadvantages worse’

The pensions gender gap could worsen now that the state pension age for women has caught up with that for men, experts warn.

Women will now start to qualify for the state pension at the same age as men, currently set at 65.

The landmark was reached on Tuesday as the pension age for women has been rising under legislation stemming from 1995.

Retirement savings provider Aegon said women on average have far less in their private and workplace pensions than men, leading to a significant gender pensions gap.

It said that previously, getting state pension from an earlier age offered some compensation – but with that now removed, the overall gender pensions gap will get worse.

Aegon's research has found that by the time women reach age 50, they have £56,000 in pension savings on average – half the £112,000 typical sum men have saved.

It found nearly half (49%) of women say they are not confident about a comfortable retirement, compared with a third (33%) of men.

Steven Cameron, pensions director at Aegon, said of the equal state pension age: "While some may see this a step forward towards equal treatment, it actually means women are a further step back compared to men with pensions.

"While limited progress is being made to close the gender pay gap, other factors impacting women's ability to save adequately for retirement including career breaks to raise a family or to care for elderly parents, aren't going anywhere.

"The equalisation of state pension age, and future planned increases are a further prompt to women to think about how much they'll need to save privately for a comfortable retirement and it can be well worth seeking financial advice."

Cannot rely on a partner's pension for retirement

Former pensions minister Ros Altmann said: "Women have always had lower pensions than men, leaving them at greater risk of later life poverty, especially as women tend to live longer than men.

"An increasing proportion of women are single and cannot rely on a partner's pension for retirement income. Women in their 50s and older have lost out most, but younger women face penalties too."

Baroness Altmann said there are many reasons why women lose out in pensions compared with men.

These include women's state pension age having increased by more than men's and at shorter notice; women having lower lifetime earnings and therefore lower workplace pensions; and a lack of pension protections for women who get divorced.

Many men also buy annuity retirement incomes which will not provide for widows, Baroness Altmann said.

She continued: "Although women have made enormous strides pushing through glass ceilings in the workplace, the gender pensions gap remains wide and new barriers have been introduced.

"Urgent measures are needed to reduce women's pension disadvantages."