Gender pensions gap: female pensioners facing tough winter with ‘shocking discrepancy’ in retirement income

“Millions of older women will be waking up and wondering how they’ll afford essential costs this winter.”

Female pensioners could be in for a particularly rough winter, with rising gas prices prompting calls for the Government to increase the help it gives older people with their heating bills.

National Energy Action and Silver Voices have called for the Winter Fuel Payment to be increased this year.

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The Winter Fuel Payment is a non means-tested allowance of between £100 and £300 paid to nearly all pensioners in November or December.

But with exclusive figures obtained by National World exposing a gender pay gap in pension income in the UK, women’s groups say UK governments need to start looking at support for pensioners as a gender equality issue.

Caroline Abrahams, director of Age UK, said the “shocking discrepancy” between men and women’s retirement income shows the gender pay gap continues long after retirement age.

“Millions of older women will be waking up and wondering how they’ll afford essential costs this winter,” she added.

Dr Mary-Ann Stephenson, director of the Women’s Budget Group, said: “With rising food and fuel costs, the poorest pensioners are facing a worrying situation this winter.”

How much worse off are women than men?

HMRC data released to NationalWorld after a Freedom of Information Act request reveals there is a 14.4% pension pay gap between men and women aged 65 or over.

Men earned £18,000 while women earned £15,400.

The figures are based on a survey of pension income for people liable to pay tax in the UK, and cover the 2018-19 year.

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But HMRC excludes anybody with a total income less than the personal tax free allowance, who are not liable to pay tax, so the poorest pensioners are not counted.

So what is the situation for men and women at the bottom end of the income bracket?

Pensioners on a low income

Pensioners on a very low income are able to claim a means-tested benefit called Pension Credit, to top up their weekly income to a minimum level of £177.10 for single people and £270.30 for a joint income if in a couple.

Those on Pension Credit are also eligible for extra help, such as a free TV licence for over 75s and Cold Weather Payments, which is a £25 premium triggered by seven consecutive days of sub-zero temperatures in a recipient’s local area during winter.

Figures from the Department for Work and Pensions (DWP) show almost twice as many women in Great Britain (Pension Credit is slightly different in Northern Ireland) are claiming Pension Credit compared to men – 940,817 versus 506,646 at the latest count in February.

According to Office for National Statistics (ONS) mid-2020 population estimates, that means around 14.2% of women aged 65 and over are claiming Pension Credit, a rate 1.5 times higher than for men, which is 9.1%.

The DWP figures also reveal 94.2% of female claimants were single, compared to 64.3% of males.

The cost of living alone falls disproportionately on women

People who live alone spend a higher proportion of their income on housing costs.

That is according to the ONS, which published figures in 2019 revealing an estimated 2.6 million women aged 65 and over were living alone – roughly 39% of the population.

That is compared to 1.4 million men, or 25%.

So not only are the poorest female pensioners 1.5 times more likely to be single than men, but older women overall are 1.5 times more likely to live alone – all contributing to an added strain on female pensioners’ finances.

Women in poverty

Analysis of DWP figures by Age UK shows one in five (20%) female pensioners in the UK were living in relative poverty in 2019-20 – defined as having below 60% of the median income after housing costs.

The median disposable income after housing costs for 2019-20 was £476 per week.

For men, 16% were in relative poverty.

The proportion of women in poverty was at a 16-year high, while for men it was at a 13-year high.

How can the Government support female pensioners?

Age UK says it is “vital” that the triple lock on pensions is reactivated, so that “the State Pension provides income which, at the very least, covers the cost of basic needs such as food, clothing and heating”.

The triple lock ensures that the State Pension increases every year in line with whatever is the highest of: the average wage increase, inflation, or 2.5%.

It has been suspended for the 2022-2023 financial year.

The Fawcett Society says NationalWorld’s analysis shows the “urgency of the Government ensuring that all pensioners who face poverty, who are disproportionately likely to be women, are aware of their rights to Pension Credit and can claim it”.

The DWP estimates that 37% of those entitled to Pension Credit are not claiming it, with single men and women equally unlikely to have claimed – 35% each.

Scottish charity Engender says UK governments must consider women’s equality when making decisions on pensions and benefits.

Lower incomes for female pensioners will “have a significant impact on their health and wellbeing, housing, lifestyle and ability to support others”, it said, and could “directly contribute to chronic ill-health, homelessness, and experience of domestic abuse”.

A DWP spokesperson said: ““We are committed to action that helps to alleviate levels of pensioner poverty and our ground-breaking pension reforms, including automatic enrolment, have helped millions more women save into a pension, many for the first time.

“Pension participation among eligible women working in the private sector has risen from 40% in 2012, to 86% in 2020.”

Age UK has urged anyone worried about money this winter to call their free advice line on 0800 169 6565.

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