Reforms to state and private pensions policies that still discriminate against women should form part of the manifestos of political parties ahead of the General Election says former pension minister Baroness Altmann.
Altmann says urgent reform is needed to protect the 20,000 to 30,000 women who accrue no state pension because they have multiple jobs that each pay less than the National Insurance limit of £5,876 a year.
Altmann also calls for a review of the qualifying earnings rules for auto-enrolment which mean only people earning over £10,000 a year in any one job are auto-enrolled into a workplace pension. This rule disproportionately impacts women who are paid less than men and who are more likely to have to take on flexible working arrangements because of caring responsibilities.
She has also called for WASPI women who were not properly notified of changes to their State Pension Age to be able to receive some early payment, to compensate for the short-notice increase in pension age which they did not have time to prepare for.
The demands form part of a 6-point manifesto for older workers that proposes a care cap and special Care Isa allowance, a flat rate of 33 per cent pensions tax relief, the replacement of the pensions triple lock with a double lock applicable to all state pension and Pension Credit, and not just new state pension and old Basic State Pension.
Altmann says: “Government plans for Brexit and the economy will dominate many people’s thinking, but a coming Election Manifesto needs to cover other important issues that will affect the lives of older voters significantly. My six-point plan would improve older people’s lives, while giving a more affordable, sustainable and fairer system for the future.
“The cracks in the National Insurance system penalise far more women than men. In addition, women who have children but are in households with incomes that disqualify them from Child Benefit have to claim the benefit even if they know they’re not entitled to it, otherwise they lose out on their State Pension credit too.
All these wrinkles in the National Insurance State Pension system should be removed, so that women are no longer discriminated against in these ways.
“Introducing a Dilnot-style cap on care costs, then allowing tax free withdrawals from pension funds if needed to pay for care, plus introducing a special Care ISA allowance – that can be passed on free of Inheritance Tax or allocating some proportion of property value up to a limit of, say, £70,000 per person, would ensure baby-boomers have incentives to prepare for their coming care costs, while also signalling that everyone will need to think about providing for care in old age, as well as pensions.
Altmann’s 6-point manifesto for older people
- Radical overhaul of social care to ensure fairer system for all – a crisis worse than pensions
- State Pension triple lock could move to a double lock, increasing by prices or earnings
- Double lock should apply to Pension Credit so poorest pensioners are protected properly
- Improve pension outcomes for women – private pensions, State Pensions and WASPI
- Reform pensions tax relief to give everyone a 33% Government bonus on their contributions
- Encourage longer working life – mid/later-life training, career reviews, apprenticeships