Your Money: Women need compensating

IT LOOKS increasingly likely that women are to be stripped of one of the few discriminatory practices that favours them - the right to draw a state pension at 60 rather than 65, the age that applies to men.

The Government is currently trying to decide how it is to bring the state pension age for men and women into line. Last week, the Social Security Advisory Committee, which advises the Government on pensions, recommended that the pension age for women be raised to 65. The switch would be phased in over 15 years. No woman now aged over 52 would be affected, but those over 42 might be caught by the phasing-in period.

Under this regime, younger women who want the option of retiring at 60 will have to pay for this themselves.

Young women will need to pump money into a private scheme, either one run by their employer, or a personal pension. And once it is set up, they will need to ensure their contributions increase with earnings - pounds 30 a month today might seem a lot to find but in 10 or 20 years' time it will not be buying a great deal of pension benefits.

A 25-year-old woman wanting to retire at 60 can expect to have to put 10 per cent of her salary into a personal pension plan if she wants to draw a retirement income equivalent to one third of the salary she is receiving on retirement. This assumes her present salary increases in line with average earnings, and that the investment fund produces middle-of-the-road investment returns.

In fact, she will probably interrupt her contributions if she takes a break in her career to have children.

Increasingly, women will need to take the demands of their pension planning into account when negotiating pay. Those who are able to join schemes run by their employers will normally benefit from the contributions the company makes on their behalf.

Unfortunately, most companies believe the rules on personal pensions are too complicated to allow them to contribute directly to an employee's scheme. This is a flaw in the supposedly flexible pension regime established in the last five years. The Government would do well to think about improvements here to help compensate women for raising their retirement age.

IS IT still worth pouring money into National Savings now the rates have been cut? If rock-solid security, fixed returns and low minimum investment levels appeal, the answer must be yes. It is possible to get better returns from some building society accounts and from Guaranteed Income Bonds offered by insurance companies. But many savers like the idea that National Savings is backed by the Government and will forsake a sliver of extra interest for that reassurance. And the Government could come under yet more pressure to reduce its rates, making today's National Savings fixed returns attractive.

After Nationwide Building Society announced its savings cuts of on average 0.4 per cent on Friday, it looks as though building societies are set to shore up their shrinking profitability by hitting savers rather than borrowers. They may well capture the initiative in the savings market now - if money continues to flow into National Savings they can repeat the threats of higher mortgage rates that forced the Government into cutting National Savings rates.

Andrew Longhurst, the pounds 300,000-a-year chief executive of the Cheltenham & Gloucester Building Society, states bluntly that people must simply get used to lower returns on their savings in a low-inflation environment.

APPEALS for aid to Somalia should make would-be givers consider enlisting the Government's help in boosting their donations. Tax relief is available on a variety of schemes but these favour large lump sums, or pre- planned covenants. The small spontaneous gift is still ignored.

The Charities Aid Foundation believes that the pounds 400 minimum gift allowed under the Gift Aid scheme, designed for one-off lump sum donations, should be reduced to pounds 100. Given the Government's penny-pinching tendencies at present, it is unlikely to want to increase its bill for Gift Aid. But when it wanted to attack mortgage interest tax relief, it restricted it to the basic rate of tax, 25 per cent. Charities might find themselves better off for a pounds 100 Gift Aid minimum, albeit restricted to basic rate tax, while the Government would be no worse off.

Vivien Goldsmith is on Holiday

Suggested Topics
FootballGerman sparks three goals in four minutes at favourite No 10 role
Rumer was diagnosed with bipolarity, attention deficit hyperactivity disorder and post-traumatic stress disorder: 'I was convinced it was a misdiagnosis'
peopleHer debut album caused her post-traumatic stress - how will she cope as she releases her third record?
A long jumper competes in the 80-to-84-year-old age division at the 2007 World Masters Championships
Radamel Falcao was forced to withdraw from the World Cup after undergoing surgery
premier leagueExclusive: Reds have agreement with Monaco
Arts and Entertainment
'New Tricks' star Dennis Waterman is departing from the show after he completes filming on two more episodes
tvHe is only remaining member of original cast
Lewis Hamilton will start the Singapore Grand Prix from pole, with Nico Rosberg second and Daniel Ricciardo third
F1... for floodlit Singapore Grand Prix
Life and Style
Walking tall: unlike some, Donatella Versace showed a strong and vibrant collection
fashionAlexander Fury on the staid Italian clothing industry
Arts and Entertainment
Gregory Porter learnt about his father’s voice at his funeral
Arts and Entertainment
tvHighs and lows of the cast's careers since 2004
Life and Style
Children at the Leytonstone branch of the Homeless Children's Aid and Adoption Society tuck into their harvest festival gifts, in October 1936
food + drinkThe harvest festival is back, but forget cans of tuna and packets of instant mash
New Articles
i100... she's just started school
ebooksAn unforgettable anthology of contemporary reportage
New Articles
Life and Style
Couples have been having sex less in 2014, according to a new survey
Arts and Entertainment
musicBiographer Hunter Davies has collected nearly a hundred original manuscripts
New Articles
i100... despite rising prices
Holly's review of Peterborough's Pizza Express quickly went viral on social media
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

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

iJobs Job Widget
iJobs Money & Business

Senior BA - Motor and Home Insurance

£400 - £450 Per Day: Clearwater People Solutions Ltd: **URGENT CONTRACT ROLE**...

Market Risk & Control Manager

Up to £100k or £450p/d: Saxton Leigh: My client is a leading commodities tradi...

SQL Developer - Watford/NW London - £320 - £330 p/d - 6 months

£320 - £330 per day: Ashdown Group: The Ashdown Group have been engaged by a l...

Head of Audit

To £75,000 + Pension + Benefits + Bonus: Saxton Leigh: My client is looking f...

Day In a Page

Scottish referendum: The Yes vote was the love that dared speak its name, but it was not to be

Despite the result, this is the end of the status quo

Boyd Tonkin on the fall-out from the Scottish referendum
Manolo Blahnik: The high priest of heels talks flats, Englishness, and why he loves Mary Beard

Manolo Blahnik: Flats, Englishness, and Mary Beard

The shoe designer who has been dubbed 'the patron saint of the stiletto'
The Beatles biographer reveals exclusive original manuscripts of some of the best pop songs ever written

Scrambled eggs and LSD

Behind The Beatles' lyrics - thanks to Hunter Davis's original manuscript copies
'Normcore' fashion: Blending in is the new standing out in latest catwalk non-trend

'Normcore': Blending in is the new standing out

Just when fashion was in grave danger of running out of trends, it only went and invented the non-trend. Rebecca Gonsalves investigates
Dance’s new leading ladies fight back: How female vocalists are now writing their own hits

New leading ladies of dance fight back

How female vocalists are now writing their own hits
Mystery of the Ground Zero wedding photo

A shot in the dark

Mystery of the wedding photo from Ground Zero
His life, the universe and everything

His life, the universe and everything

New biography sheds light on comic genius of Douglas Adams
Save us from small screen superheroes

Save us from small screen superheroes

Shows like Agents of S.H.I.E.L.D are little more than marketing tools
Reach for the skies

Reach for the skies

From pools to football pitches, rooftop living is looking up
These are the 12 best hotel spas in the UK

12 best hotel spas in the UK

Some hotels go all out on facilities; others stand out for the sheer quality of treatments
These Iranian-controlled Shia militias used to specialise in killing American soldiers. Now they are fighting Isis, backed up by US airstrikes

Widespread fear of Isis is producing strange bedfellows

Iranian-controlled Shia militias that used to kill American soldiers are now fighting Isis, helped by US airstrikes
Topshop goes part Athena poster, part last spring Prada

Topshop goes part Athena poster, part last spring Prada

Shoppers don't come to Topshop for the unique
How to make a Lego masterpiece

How to make a Lego masterpiece

Toy breaks out of the nursery and heads for the gallery
Meet the ‘Endies’ – city dwellers who are too poor to have fun

Meet the ‘Endies’ – city dwellers who are too poor to have fun

Urbanites are cursed with an acronym pointing to Employed but No Disposable Income or Savings
Paisley’s decision to make peace with IRA enemies might remind the Arabs of Sadat

Ian Paisley’s decision to make peace with his IRA enemies

His Save Ulster from Sodomy campaign would surely have been supported by many a Sunni imam