Many more women go out to work than 50 years ago, but in retirement they will still be worse off than men. Teresa Hunter reports:

Over the past 50 years the working lives of women have changed beyond recognition. But in one vital area little progress has been made: women today still have woefully inadequate pension provision and are often as dependent on their husbands for an income in retirement as their 1950s counterparts. 

The EOC argues that discrimination against women is inherent in our pension system

Age Concern estimates that one in four women face poverty in old age - a situation denounced as a national scandal by all three major political parties. 

David Blunkett, the work and pensions secretary, is due to publish a report on this issue in November. But while this will look at the underlying causes of the problem, it is unlikely to propose remedies.

So why are women so much worse off than men? 

The over-riding problem is that both the state and occupational pension schemes are based on the contributions made during a working life and most women still take lengthy career breaks to raise a family or care for ailing relatives. 

In addition, women are still far more likely to be in lower-paid and part-time work than men. This leaves many with far smaller state pensions and less opportunity to accrue a reasonable "top-up" pension from their employer. 

The figures speak for themselves: fewer than one in three women aged 65 to 69 receives a full state pension. (This figures drops even further for those aged 70 or more.) In contrast, 85 per cent of men aged 65 or over receive the full state pension.

The picture is even worse when it comes to company pensions. Twenty years ago just two thirds of women aged 35 to 49 were in paid employment. 
More than half of those were in part-time jobs according to Adair Turner, the chairman of the Pension Commission. 

In contrast, 88 per cent of men in this age group were in full-time employment. It is clear why men retiring today are in a far better financial position than women.

At last week's Labour party conference, the Equal Opportunities Commission pressed Blunkett to introduce a universal pension, roughly equivalent to the current basic state pension, which would be paid to all regardless of their working record.

There will be a debate on Women and Pensions at the Conservative Party conference in Blackpool, where speakers will include the shadow pensions minister Nigel Waterson, Jenny Watson, the acting chair of the Equal Opportunities Commission, and Helen McCarthy, the head of pensions and savings at the Association of British Insurers. It could be a stormy meeting - as their views differ sharply on how best to improve the lot of women in retirement.

The EOC argues that discrimination against women is inherent in our pension system and therefore it must be replaced by one that works for women as well as men. 

But although the former secretary of state for work and pensions, Alan Johnson, flirted briefly with the idea of a universal pension - much along the lines suggested by the EOC - the current Government thinking seems to be that it would be wrong to abandon a contributory pension.

In this it is falling in line with the Conservatives' views. Waterson told The Sunday Telegraph: "We don't believe you need to junk the existing system to improve women's pensions. People are quite wedded to the idea of a contributory system.

"There is clearly a problem with women's pensions, but its partly a generational thing. Many women have been successful getting back into work and building up a pension in their own right. This will improve with more women in the workforce."

In his interim report, Turner agrees that the pension position of women compared to men will improve, but largely because men can look forward to poorer pensions themselves in future.

He says: "Over the next 30 years we are likely to see a narrowing of the gender gap in pensioner income, a trend which is already visible. This does not mean that the position of future women pensioners will be adequate since the male position with which they are converging is itself getting worse. Many women will continue to accrue inadequate pensions because of lower earnings than men and fewer years in paid employment."

The EOC is convinced that the problem is not "generational". Watson says that without radical change, women in the workplace today will encounter exactly the same financial problems as those currently in retirement.

She adds that the situation could even get worse. From 2020 women, like men, have to work until they are 65 to pick up a full state pension. And, like men, they will have to pay national insurance contributions for 44 years to get the maximum payment. Given so few of them manage to clock up 39 years of NI contributions, far more may miss out.

Social changes are also having an adverse impact on women's pensions. Far fewer married women and high divorce rates mean many no longer have their husband's pension to help support them in retirement. The Government Actuary's Department estimates that by 2021, 38 per cent of women aged between 55 and 64 will live alone.

Legislation has been changed to allow a pension to be "split" on divorce, but relatively few women have taken advantage of the new rules.

The number of people choosing to marry has also declined. Women opting to live with a partner rather than get married, may not realise that this too can leave them worse off in retirement. 

Only those who have been wed will qualify for a widow's pension from their partner's company or state pension. 

The decision by many company's to switch from a final salary scheme to a money purchase plan may also have a detrimental affect on women's pension provision. 

While many final salary schemes automatically paid a reasonable widow's pension, this is only available under a money purchase arrangement if the retiring employee accepts a lower annual income. 

As the cost of buying this widow's protection tends to be high, very few pensioners take it, so the pension dies with the man. 

What does the EOC propose to improve the lot of future women pensioners? 

Watson says the it would like to see the Government adopt a three pronged-approach. It wants to see a universal pension introduced backed by a beefed-up state second pension (S2P) which is specifically targeted at parents and carers.

Full-time carers receive a credit towards the basic pension for each year they spend looking after young children. This is known as Home Responsibilities Protection, but you can only receive a credit for every full tax year you remain out of work. 

Another problem is that if, on retirement, your national insurance record shows that you have less than 10 year's worth of contributions (either through national insurance payments or credits) you qualify for nothing.

Finally, the EOC believes there should be better incentives to encourage those who are able to save to invest for their own futures, although for that to happen it believes there must be significant improvements in women's salaries.

But despite this doom and gloom there are some glimmers of light on the horizon, although they flicker precariously. For the first time, more women than men are now likely to have access to a final salary pension. This is because they dominate the public sector, although many of these final salary pensions are linked to lower-paid part-time jobs.

Many elderly women living in the direst poverty have also been helped by Labour's pension credit. However, increased means-testing inherent in the system has triggered a collapse in pension savings elsewhere.