More women to get state pensions

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The proportion of women set to receive the full basic state pension is set to nearly double in 20 years time, the Office for National Statistics (ONS) has said.

Its latest Pension Trends report found that in September 2010 fewer than half (48 per cent) of female pensioners received a full basic state pension (BSP), compared with 87 per cent of male pensioners.

Many women in the current generation of pensioners failed to build up full or near-full BSP entitlement under a previous system in place before April 2010, mainly because of broken work histories and part-time work patterns, the ONS said.

However following changes to the law, 95 per cent of women reaching state pension age (SPA) in the UK in 2030/31 are expected to receive a full BSP.

The Pensions Act 2007 changed the rules on building up entitlements to the BSP, including cutting the number of years needed to qualify for the full pension.

The “purchasing power” of the BSP is also forecast to rise, the ONS said, following the Pensions Act which re-linked state pension increases to earnings.

In 2010 the Government introduced the “triple lock” policy, guaranteeing that BSP will be increased each year by average earnings growth, inflation or 2.5 per cent, whichever is higher.

Forecasts by the Department for Work and Pensions (DWP) suggest that by 2030 the purchasing power of the BSP would increase by almost half.

However it is also suggested that 60 per cent of the female baby boomers reaching state pension age between 2016 to 20 will have entitlements of less than £140 per week in 2011/12 earnings terms, the ONS said.

ONS head of pensions analysis Sarah Levy said: “In the long run things look set to improve in the number of women receiving basic state pensions.

“The legislative changes come in gradually and we have still got a large number of people who retired under the old system.”

Earlier this month, the Government announced changes to the planned increase in the state pension age, saying that tens of thousands of women would benefit at a cost of more than £1bn.

The DWP said a plan to raise the state pension age to 66 in 2020 would be delayed by six months from April 2020 to October 2020.

About 245,000 women and 240,000 men would benefit, including 33,000 women who would have experienced a two-year rise in their state pension age, the Government said.

However unions said the move gave “precious little comfort” to women, while experts warned women’s pensions plans would be thrown into disarray.

Pensioners have been lobbying Parliament for increased rights in retirement, including a higher state pension.

The National Pensioners Convention (NPC) is pressing for changes including a National Care Service, paid for through general taxation, and a winter fuel allowance of £500 per pensioner household to help old people pay rising energy bills.

The NPC has said the UK’s state pension was among the least adequate in Europe, and sixth from bottom out of the world’s 46 most developed countries.

The ONS yesterday also released its Occupational Pension Schemes Survey for 2010, which found that active employee membership of such schemes is on a slide to levels not been seen for half a century.

The highest number of active members was recorded in 1967, when there were 12.2 million.

But by last year there were 8.3 million active members – the lowest level since the 1950s, the ONS said.

Since 2004, public sector active membership has overtaken private sector active membership as numbers in the private sector have fallen sharply.