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Women and pensions
If you are a woman, you are more likely to receive a lower State retirement income than a man.
Women are more likely to have career breaks and work part-time than men and therefore tend to pay less National Insurance Contributions (NICs) over a working lifetime. As eligibility for State benefits is dependent on NICs, women naturally lose out from this system and few qualify for the full Basic State Pension.
Women also tend to live longer than men do, and this means that not only do women receive less income from the State, it also has to cover a longer period of retirement.
The extent of gender inequality in retirement has been highlighted by the Pensions Commission, an independent body set up by the Government to look at pensions saving in the UK. The Commission identified that women pensioners in the UK are significantly poorer than men, indicating there is an even greater need for women to supplement State benefits. *
If you are a woman you may need to think about saving more for you retirement. And if you are contemplating a career break it is important to seek financial advice to help you understand the financial implications, not only on your immediate income but also on your long term income as well.
* Source: Pensions:Challenges and Choices, Pensions Commission, 2004
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