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Women at Risk of Retirement Poverty
This
is
London
United
Kingdom
August 25, 2005
Women are risking retirement poverty by relying on their partner's pension to see them through their old age, research has warned.
Around 45% of women aged over 50 say their main income once they stop work will come from their partner's pension, but by the time they retire, one in seven women will be divorced.
Insurer Norwich Union warned that many women who divorced before new pension sharing rules were introduced in December 2000 were not entitled to a share of their husband's pension. At the same time women often opt to keep the family home, rather than have a slice of their husband's retirement provision. Research carried out for the group by market analyst Mintel found that just 4% of divorced women aged over 50 had received a share of their ex-husband's pension.
However, despite often being cash poor during retirement, women tended to be asset rich, with 49% of women aged over 50 owning their home outright, rising to 60% among people aged over 65.
The research also found that women were most likely to be awarded the house in a divorce settlement, with more than half of women who received a settlement keeping the family home.
Unsurprisingly, nearly three out of 10 women said they were relying on their property to provide them with an income during retirement.
Nigel Spencer, head of marketing for Norwich Union equity release, said: "Women are increasingly becoming the poorer sex when it comes to retirement, and it's worrying to see this problem compounded due to rising divorce rates amongst the over 50s. Many women have sacrificed careers, and therefore their own pension, to raise their family and, as a result, are being unfairly punished."
He added that women faced a "double whammy" in retirement of having lower pension provision, combined with higher life expectancy than men.
Pensions Reform Minister Stephen Timms said: "Since 1997, 1.3 million women in retirement have been lifted out of absolute poverty, and since the introduction of the State Second Pension in April 2002 1.5 million carers have begun to build up extra pension entitlement.
"However, we accept that inequalities in the current system are a serious issue, which is why we will soon be hosting an event to look specifically at how we can make the pensions system work better for women. We will also publish, prior to the event, a detailed analysis of the current situation that can be used to inform the debate and ensure any future recommendations fully address the problems faced."
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