Sorry, old girl

Pensions are one of the last bastions of sexual inequality. Without careful planning, women can find themselves with very meagre pickings in retirement. By Nic Cicutti

It barely seems conceivable, more than 20 years after sex discrimination was meant to have been relegated to the history books, that women are likely to be much worse off than men at retirement.

Yet, as millions of women will discover, they are likely to face a drastic drop in their living standards when they finally stop work.

A recent survey by Flemings, an investment company, found that 53 per cent of women - some 10 million - will be affected in this way, compared with 40 per cent of men. There are several reasons for this, linked in part to expectations placed on women by society. For example, enforced career breaks by women, usually caused by caring for children or elderly relatives, mean that they are less likely to be able to build up uninterrupted periods of service with employers, ensuring bigger pensions. Their longevity relative to males ensures that if women start personal pensions, they will receive a smaller income.

One bizarre side-effect of equality legislation brought in by the Government in the past few years has been to worsen the position for women. After several European Court judgments in cases brought by women who demanded equal pension rights, the Government equalised retirement ages - by raising that of women to 65. Women under 40 at present will have to wait until 65 for their pension.

It is still possible to do something about your pension. The first step is to obtain an immediate forecast of what pension you will be entitled to by the state. This takes into account the National Insurance contributions you have paid to date.

Fill in form B19, obtainable from your nearest Benefits Office. Complete the form and send it in to the Retirement Benefits Forecasting Unit, Contributions Agency, DSS, Newcastle-upon-Tyne, NE98 1YX.

If you have spent part of your working life at home, check whether the forecast includes Home Responsibilities Protection or Invalid Care Allowance, which both count towards the missing years when you have not been paying National Insurance contributions. Once you know how much you will receive from the state, plan how to make up the difference in terms of how much money you will need at retirement. This means that if you are in work, where possible you should join the company pension scheme, even if you are a part-timer. Ask the personnel officer or a union official for details.

In addition to the basic state pension, there is an additional State Earnings Related Pension scheme, or Serps. This is partly linked to your earnings. In the past 15 years, the Government has acted to cut the amount paid through Serps, while at the same time offering financial inducements to opt out of the scheme.

For those who have high earnings and are in work for long periods, it may make sense to opt out of Serps. The inducements are based on a percentage of what you earn. They are paid into a personal pension scheme and invested. This may allow you to benefit from higher investment returns so that you end up with more money when you retire.

But if, like many women, your salary is low - beware. Opting out of Serps means you might only have a small percentage paid into your rebate-only pension, while taking a career break could leave you vulnerable to flat- rate charges. You could end up with less at the end than you paid in. Talk to an independent financial adviser about whether you should be opting out of Serps. Call 0117 971 1177 for details of an IFA near you.

If you are choosing a personal pension, always look for a pension that is highly flexible. You need something that will not penalise you for stopping contributions and starting them again and which can cope with temporary reductions in premiums. Charges should be spread across the lifetime of a product, not levied up-front.

Again, talk to an independent adviser. Companies with cheap and flexible pension products include Eagle Star, Equitable Life and Virgin.

If you are getting divorced and your husband is a member of a pension scheme, tell your solicitor. You may be entitled to a share of your husband's pension - though he may be entitled to a slice of yours.

Finally, if you are not working but still want to set up a nest egg, don't despair because the law says you can't set up a pension. There are other tax options including Personal Equity Plans, or Tessas, available through most banks and building societies. Once more, talk to an adviser.

Most important of all, don't leave it until too late to prepare for your retirement. Relying on men is never a good idea at the best of times. It becomes even less so when it comes to ensuring a good time when you stop work Nic Cicutti, personal finance editor of The Independent, has written a Guide to Pensions Planning. The 52-page guide, sponsored by Equitable Life, a leading life insurer and pension provider, is available free by calling 0800 137372, or fill in the coupon below

PROMOTED VIDEO
Have you tried new the Independent Digital Edition apps?
Sport
Mario Balotelli pictured in the win over QPR
footballInternet reacts to miss shocker for Liverpool striker
Voices
Sol Campbell near his home in Chelsea
voices
News
Kimi the fox cub
newsBurberry under fire from animal rights group - and their star, Kimi
Arts and Entertainment
Ella Henderson's first studio album has gone straight to the top of the charts
music
News
<p>Jonathan Ross</p>
<p>Jonathan Ross (or Wossy, as he’s affectionately known) has been on television and radio for an extraordinarily long time, working on a seat in the pantheon of British presenters. Hosting Friday Night with Jonathan Ross for nine years, Ross has been in everything from the video game Fable to Phineas and Ferb. So it’s probably not so surprising that Ross studied at Southampton College of Art (since rebranded Southampton Solent), a university known nowadays for its media production courses.</p>
<p>However, after leaving Solent, Ross studied History at the School of Slavonic and East European Studies, now part of the UCL, a move that was somewhat out of keeping with the rest of his career. Ross was made a fellow of the school in 2006 in recognition of his services to broadcasting.</p>
TV

Rumours that the star wants to move on to pastures new

Life and Style
fashion
News
Paul Nuttall, left, is seen as one of Ukip's key weapons in selling the party to the North of England
i100
Arts and Entertainment
Russell Brand labelled 'left-wing commie scum' by Fox News
TV
Arts and Entertainment
BBC's Antiques Roadshow uncovers a TIE fighter pilot helmet from the 1977 Star Wars film, valuing it at £50,000
TV

TV presenter Fiona Bruce seemed a bit startled by the find during the filming of Antiques Roadshow

News
people

Comedian says he 'never laughed as hard as I have writing with Rik'

Sport
Steven Caulker of QPR scores an own goal during the Barclays Premier League match between Queens Park Rangers and Liverpool
football
Arts and Entertainment
artKaren Wright tours the fair and wishes she had £11m to spare
News
i100
Life and Style
Kirsty Wark and Camila Batmanghelidjh been invited to take part in Women Fashion Power, a new exhibition that celebrates the way women's fashion has changed in relation to their growing power and equality over the past 150 years
fashionKirsty and Camila swap secrets about how to dress for success
Arts and Entertainment
Joy Division photographed around Waterloo Road, Stockport, near Strawberry Studios. The band are Bernard Sumner (guitar and keyboards), Stephen Morris (drums and percussion), Ian Curtis (vocals and occasional guitar), Peter Hook (bass guitar and backing vocals).
booksNew book on Ian Curtis sheds fresh light on the life of the late singer
Finacial products from our partners
Property search
Going down the wrong road: parking fines are
nudging people into debt difficulties

Charges related to car parking rising and leading to serious money woes

Going down the wrong road: parking fines are nudging people into debt difficulties

Stacks of income: Drax is among the companies in Neil Woodford’s portfolio that he believes will pay strong dividends

Mark Dampier: Woodford’s young companies could be the stars of the future

Stacks of income: Drax is among the companies in Neil Woodford’s portfolio that he believes will pay strong dividends

A trader works on the floor of the New York Stock Exchange

Simon Read: The markets might not be calm but you should be

Don't panic, it’s a wise idea to check investments regularly to ensure they are on target for your hoped-for returns

Only six per cent of the 13,000 new homes bought during Help to Buy’s first nine months were in London

Money Insider: Help to Buy must be boosted by building

With little or no wage growth being seen in the UK, increasing house-price inflation could see the number of first-time buyers slide further, unless there’s a new accelerated house building programme

House buyers can take their pick of more than 3,500 home loans, the most available since the financial crisis

Simon Read: Those cheap home loans may be built on shaky foundations

You should ignore the headline offers and trickery and work out the total cost of borrowing under different deals

Denise Leigh, who appeared in a production
of Rigoletto with Alan Opie, was left without an essential service

The opera singer, the broadband delay and why customers aren’t divas if they expect a good service

Denise Leigh, who appeared in a production of Rigoletto with Alan Opie, was left without an essential service

Problem debt adds £8bn cost to the economy

A charity has calculated the cost to us all of unmanageable debt – from lost productivity to the extra demands on the NHS

Payday loan stores are to face tougher regulations after moves proposed by the Financial Conduct Authority (FCA) call on more responsible lending

Calls for payday lenders to sign up to an officially recognised price comparison site

The regulators are at last tackling the high-profile payday lenders, but they appear to be ignoring the growing problem of internet loan firms

According to the research, only one in five customers trusts their energy company

Rap for energy firms won’t stop the rising prices

As the cold weather hits, the question of soaring bills will be felt by each of us at home

Nikki Galloway has enthusiastically embraced buying and selling over the internet

Selling goods online: The pros and cons

Nikki Galloway (above) sells jewellery via her own website as well as on Facebook, Amazon and Bouf

The city of Queenstown on the shores of Lake Wakatipu with the Remarkables mountain range in the background.

You can have it all: Asian stocks get on the dividend bandwagon

Queenstown on Lake Wakatipu in New Zealand. The country’s stock market was boosted last month on John Key’s re-election

Staff at work in the packet and parcel section of the Royal Mail's Swan Valley mail centre

Bargain hunter: Halfords’ zero-VAT child car seats are cheap and with a safety message

Royal Mail is cutting its small parcel charges from 20 October

Elderly people living in certain countries abroad are being denied pension rises

Anyone who moved to countries including Australia, Canada, South Africa and a 100 other places, have had their pensions frozen at the rate it was paid at when they left the country

Governor money plans to save clients time and cash with its online service

Simon Read: Relegate struggling funds from your plans

Every fund has good years and bad, but consistent underperformance over a number of years points to something more fundamental

Investments: Spot the difference and pick a fund that’s ready to go it alone

Nick Train thinks luxury fashion brand Burberry is one of the companies that has prospered in digital marketing

Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

ES Rentals

    iJobs Job Widget
    iJobs Money & Business

    Operational Risk Manager - Asset Management

    £60,000 - £80,000: Saxton Leigh: Our client is an leading Asset Manager based...

    Project Coordinator - 12 month contract

    £27000 - £32000 Per Annum: Clearwater People Solutions Ltd: Our large charity ...

    IT Operations Manager - London - £55,000

    £50000 - £55000 per annum + bonus + benefits: Ashdown Group: IT Relationship M...

    Banking Solicitor NQ+

    Highly Attractive Salary : Austen Lloyd: NOTTINGHAM - BRILLIANT FIRM - You wil...

    Day In a Page

    Oscar Pistorius sentencing: The athlete's wealth and notoriety have provoked a long overdue debate on South African prisons

    'They poured water on, then electrified me...'

    If Oscar Pistorius is sent to jail, his experience will not be that of other inmates
    James Wharton: The former Guard now fighting discrimination against gay soldiers

    The former Guard now fighting discrimination against gay soldiers

    Life after the Army has brought new battles for the LGBT activist James Wharton
    Ebola in the US: Panic over the virus threatens to infect President Obama's midterms

    Panic over Ebola threatens to infect the midterms

    Just one person has died, yet November's elections may be affected by what Republicans call 'Obama's Katrina', says Rupert Cornwell
    Premier League coaches join the RSC to swap the tricks of their trades

    Darling, you were fabulous! But offside...

    Premier League coaches are joining the RSC to learn acting skills, and in turn they will teach its actors to play football. Nick Clark finds out why
    How to dress with authority: Kirsty Wark and Camila Batmanghelidjh discuss the changing role of fashion in women's workwear

    How to dress with authority

    Kirsty Wark and Camila Batmanghelidjh discuss the changing role of fashion in women's workwear
    New book on Joy Division's Ian Curtis sheds new light on the life of the late singer

    New book on Ian Curtis sheds fresh light on the life of the late singer

    'Joy Division were making art... Ian was for real' says author Jon Savage
    Sean Harris: A rare interview with British acting's secret weapon

    Sean Harris: A rare interview with British acting's secret weapon

    The Bafta-winner talks Hollywood, being branded a psycho, and how Barbra Streisand is his true inspiration
    Tim Minchin, interview: The musician, comedian and world's favourite ginger is on scorching form

    Tim Minchin interview

    For a no-holds-barred comedian who is scathing about woolly thinking and oppressive religiosity, he is surprisingly gentle in person
    Boris Johnson's boozing won't win the puritan vote

    Boris's boozing won't win the puritan vote

    Many of us Brits still disapprove of conspicuous consumption – it's the way we were raised, says DJ Taylor
    Ash frontman Tim Wheeler reveals how he came to terms with his father's dementia

    Tim Wheeler: Alzheimer's, memories and my dad

    Wheeler's dad suffered from Alzheimer's for three years. When he died, there was only one way the Ash frontman knew how to respond: with a heartfelt solo album
    Hugh Bonneville & Peter James: 'Peter loves his classic cars; I've always pootled along fine with a Mini Metro. I think I lack his panache'

    How We Met: Hugh Bonneville & Peter James

    'Peter loves his classic cars; I've always pootled along fine with a Mini Metro. I think I lack his panache'
    Bill Granger recipes: Our chef's heavenly crab dishes don't need hours of preparation

    Bill Granger's heavenly crab recipes

    Scared off by the strain of shelling a crab? Let a fishmonger do the hard work so you can focus on getting the flavours right
    Radamel Falcao: How faith and love drive the Colombian to glory

    Radamel Falcao: How faith and love drive the Colombian to glory

    After a remarkable conversion from reckless defender to prolific striker, Monaco's ace says he wants to make his loan deal at Old Trafford permanent
    Terry Venables: Premier League managers must not be allowed to dictate who plays and who does not play for England

    Terry Venables column

    Premier League managers must not be allowed to dictate who plays and who does not play for England
    The Inside Word: Brendan Rodgers looks to the future while Roy Hodgson is ghost of seasons past

    Michael Calvin's Inside Word

    Brendan Rodgers looks to the future while Roy Hodgson is ghost of seasons past