Yahoo Finance One in three Black or Asian women pensioners living in poverty
As the dust settles following the triple lock debate, new figures from charity Age UK reveal the true extent of the financial crisis faced by Britain’s retired women of colour, with one in three facing old age in poverty.
The rise in women’s state pension age has meant there are now few female pensioners – a fall of 800,000 since 2012-2013 to around 6.3 million. Despite this, the number living in poverty has increased by around 260,000 to 1.25 million over the same period.
Single females are also at much higher risk of poverty than single men or pensioner couples, while those who rent their homes are far more likely to be on or below the breadline. However, pensioners of any gender from Black and Asian communities are around twice as likely to be living in poverty as white pensioners, the study found.
“I think many will be shocked to see how many women pensioners are now living in poverty – 1.25 million, equivalent to one in five. [It’s] a big cause for concern,” Caroline Abrahams, charity director at Age UK, says.
“It’s important to recognise too just how much greater the risk of poverty in later life is for women who are Black or Asian, compared to their White peers. The fact that as many as one in three are living below the breadline demonstrates a level of structural inequality in our society, linked to race, that should be a wake-up call for both national and local policymakers.”
Nor is this a generation-specific problem – far from it.
When life expectancy is taken into account, the gender pensions gap for the next cohort of retirees, the over-55s, has widened to almost £184,000 in the last year. That’s up by just under £27,000 (17 per cent) in an ongoing trend that shows no sign of slowing despite the fact that, on average, women contribute a greater proportion of their smaller income towards pension pots than men do, according to data from equity release lender more2life.
To look at it another way, the research suggested women would have to work for an average of 54.5 years to reach the same level of pension savings that a man can achieve in only 40 years.
Meanwhile, almost a third of Britain’s female population says their financial situation has worsened since the start of the pandemic compared with only a quarter of men.
Dave Harris, CEO at more2life, says: “Although women appear to be better at saving into their pension, they still face a retirement that is less comfortable and financially secure than their male counterparts.
“The stark difference in retirement incomes highlights the need to address the root causes of financial gender inequality and better support women as they make choices around how to use their assets both in the lead up to and during retirement.
“It’s clear that the Covid-19 pandemic has caused significant disruption to many people’s retirement savings, but the impact has been most acutely felt among older women. As we begin to think about what a post-Covid society looks like, it’s vital that the industry and government does more to encourage women to engage with long-term financial planning.”
With such uncertainty and outright concern, barely half the UK’s female adults think they will be able to retire as planned and almost half believe they will have to continue working to some extent, Canada Life has found.
“This has no doubt been exacerbated by the gender pensions gap, currently estimated to be twice the size of the gender pay gap,” Sean Christian, executive director of Canada Life’s wealth management division, says.
This gap in earnings and savings often appears when women take time away from work to bring up a family or decide to return to work part-time. Women are also more likely to work part time in low-paid work where they miss out on the benefits of being auto-enrolled into a pension, simply because they don’t meet the criteria.
“This inequality can only be addressed through decisive policy action to address the pension gender divide,” he warns.
“Relatively simple changes to the way auto-enrolment works today would benefit both men and women but would go a long way towards levelling the playing field.
“Changes such as removing the lower contributions limit would let more people benefit from every pound earned, while removing the £10,000 threshold would make auto-enrolment more inclusive and begin to level up pensions for all.”
Anyone who is worried about money or who may be entitled to claim benefits in later life is invited to call the Age UK Advice line free of charge on 0800 169 65 65 (8am-7pm), visit www.ageuk.org.uk/money or contact their local Age UK for free information and advice
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