Pension credit myths
There are also several misconceptions surrounding eligibility for pension credit that need to be addressed. One is that you cannot claim it if you own your own home, another is that you are not eligible if you have savings.
You can still claim pension credit in both these cases. If you have £10,000 or less in savings and investments this will not affect your pension credit. If you have more than £10,000, every £500 over £10,000 counts as £1 income a week. For example, if you have £11,000 in savings, this counts as £2 income a week.
Gender pension gap is not a pension problem
It is to be hoped there will be less of a need for pension credit in the future as more women retire on the new state pension and will also have accrued workplace pensions through auto-enrolment. But it is worth saying that the gender pensions gap cannot be solved by pensions alone.
The gender pension gap is not so much a pensions issue as a workplace one. Women continue to face several hurdles throughout their working lives that threaten to throw a spanner in the works of their retirement planning.
The first is of course the gender pay gap itself – if women are not paid the same as men then they cannot contribute as much as them either. Secondly, time spent out of the workforce either looking after small children or elderly relatives derails retirement saving at both ends of women’s careers.
If women do return to work, then it is often on a part-time basis and they can struggle to receive the same career development opportunities they otherwise would have.
Menopause is another issue that could impact on women’s ability to build their pension wealth. According to research from Bupa and the Chartered Institute of Personnel and Development, almost 1mn women have left the workforce due to the symptoms of menopause.
On average menopause happens around the age of 51 but can affect women for many years either side. It is not a subject often talked about and while more employers are introducing policies on how to support affected workers there is still a long way to go.
Potential solutions
There are several options that can help address the gender pension gap. The first, and most obvious, is to boost auto-enrolment. The 2017 auto-enrolment review proposed reducing the minimum age from 22 to 18 as well as removing lower earnings limits. This opens auto-enrolment to a new tranche of people and people will be able to save more.
