Tuesday, December 07, 2010

Why the gender difference in pension ages?

I was chatting to someone the other day who asked me, mid conversation, how it was that men and women retire at different ages. As a lefty my natural instinct was to assume I knew the answer and began to start pontificating when it suddenly stuck me - horror! - I actually had no idea.

Quickly stifling my urge to make something up I confessed my ignorance and set about finding the answer.

Modern universal pensions were introduced in 1946 building on far more piecemeal work that had been done by the great reforming government of 1906 - but why the gender differential? Forgive my cynicism but it seems unlikely that women were being given a little holiday as a reward for being so put upon during their working life.

Well, actually a great many women weren't even entitled to a pension initially but the most convincing explanation I've seen so far (from Maria Iacovou with additional material from others) centers around the structure of the family.

In general when getting married, men would be older than women and this was an attempt to allow couples to retire at about the same time. How romantic? Well, who would look after hubby while he was knocking around the house if the Missus wasn't retired at the same time? Who'd supply him with cups of tea and little snacks... he certainly couldn't do it himself, that would be unthinkable!

This was only achievable if women were kept financially dependent on men and so, for example, married women weren't entitled to the same state pension rights and had to rely on their husband's. This wasn't just unequal pay for equal work, it was the national reliance on the unpaid work of women reflected in the pensions system.

Now the employment and family structure has changed we have a situation that, through historical accident, slightly advantages women. Well that can't be allowed to continue can it readers? As it stands in the UK men retire at 65 and women at 60, although women's retirement age is set to gradually rise and equalise with men's and by December 2018 both will begin to rise to 66 over two years.

So this equalising of retirement age allows women to keep working in underpaid jobs longer now their services are no longer locked into the home. This means that women, who are on average paid less than men, end their working lives with less contributions and in a potentially worse position than men when they reach retirement age.

I've found this quite a hard question to find the answer to so if you have more background information - or want to disagree with my thesis - please do leave a comment as it's not an issue I know much about. Damn, I've said it again.

9 comments:

Charlie said...

I think it's misleading to say 'as it stands' men retire at 65 and women at 60. This only applies if you are female and over 60 now!


Anyone who's 55 now or younger will retire at 65 or 66 or 67.

What I don't understand is what you are gunning for? Are you saying that it should remain at 60 for women? I don't agree with that all.

Jim Jepps said...

If that helps clarify the situation - thanks.

I'm not sure I'm gunning for anything - I'm just trying to find out where the differences in retirement ages came from.

I'm not campaigning. It's interesting.

Ben S said...

"As a lefty my natural instinct was to assume I knew the answer and began to start pontificating when it suddenly stuck me - horror! - I actually had no idea."

Yes, YES - this is so true... I am trying to teach myself to take a deep breath before I start, in the hope that I will realise on the exhale that I have no idea about (given topic).

FonyBlair said...

There is also a gender difference in annuity rates. Women receive less in retirement per annum from their pension fund as statistically they live longer.

As a basic life insurance contract this seems to make perfect sense but not to our "leftie" friends in the EU who want to make such actuarial definites illegal and subject to discrimination laws.

And they really think Insurance companies will suddenly pay more to women because of this.....failed again!

longrun2 said...

In 1906 and in 1946 most jobs involved physical labour so there were two reasons for women retiring younger than men:
(i) they were, on average, unable to cope with the physical demands of the job at an earlier age and
(ii) women were, on average, younger than their husbands.
You have ignored the option for women to either take a pension based on their own NI contributions or one based on those of their husbands if they were married. A single woman could retire at 60 on the same pension as a single man at 65. A married woman who had worked throughout her life could do the same. A married woman who had to give up paid work to look after children usually got a pension based on her husbands' NI contributions (i.e. except when her own NI contributions provided a higher entitlement). The system was biased towards giving women a higher return on their contributions than men, with a significant bias in favour of married women, and a smaller one in favour of single women at the expense of single men.
When I was a single man, I accepted this because it was promoting equality in outcome at the expense of those of us who could afford it.
I find the sexist comments offensive - as I mostly work from home I do more housework than my wife who has to spend time travelling as well as working and my father first cooked a family Christmas dinner when he was 17; I've cooked most of them since he died.

Jim Jepps said...

What sexist comments?

I think the point about the changing nature of work is interesting but we shouldn't over egg the pudding. Most women in the post-war period were not in jobs that would be described as 'physical labour' and I don't think this factor has as much influence as your saying. I have wondered about health reasons in the pre-HRT, pre-maternal health days... but can't find any evidence that this was part of their thinking.

Please do highlight it if you can find it.

Actually after '46 many married women were not allowed to claim pension at all - it certainly is not true to say the system was biased in favour of married women as it rested on the assumption of the husband's contributions.

Obviously over time these rules have changed so I'm cautious about trying to go into the in's and out's of the system as it's complex enough without having to go into all the rule changes over time too.

rashid1891 said...

Actually after '46 many married women were not allowed to claim pension at all - it certainly is not true to say the system was biased in favour of married women as it rested on the assumption of the husband's contributions. This is very very good side Thanks MA

rashid1891 said...

he system was biased towards giving women a higher return on their contributions than men, with a significant bias in favour of married women, and a smaller one in favour of single women at the expense of single men.I like it so much This is very very good side Thanks MA

andy newman said...

Jim

I remember hearing a Radio 4 programme about the Spinster's League some years ago which directly addressed this issue of why womens' retirment age is different.

IIRC it has an understandable social origin in the aftermath of the First World War, when there were hundreds of thousands more women than men, due to raw casualties. This meant that many women were the breadwinners in their households, and often had a social life built around what were then known as spinsters clubs.

IIRC the issue arose that widows received a pension at 55, but working women did not receive one until they reached 65. However, unlike men, many older women were also carers for their own elderly parentss. Also, because there was a presumption that men were breadwinners for a family, and women were not, when there were redundancies it was the women who wrre laid off first.

During the 1930s there was therofre a growing number of older women unemployed, who were often also carers, but they did not qualify for a pension, and were on national assistance.

the spinsters league therefore conducted an extremelt militant campaign to allow women to get a pension earlier. At one stage they even occupied 10 Downing Street.

I may not have al the details right, but that was the gist of it from my memory of the radio prog