This is no country for old women

Noel whitesideI haven’t been a great fan of academic pensions research or researchers for that matter. The research is typically a big whinge about people not getting a fair deal, the researchers comfortably cocooned in university sponsored sinecures or pensions.

So I went to a morning “Rethinking the economics of Pensions” with low expectations.Held at the Royal Statistical Society this sounded like dry stuff.

I wanted to offer moral support to my colleague Hilary Salt (speaking) and my friend Con Keating (organising).


Hilary delivered a barn-stormer of a paper articulating with growing passion her central theme that “growth has no limits”. This translates into a view of the world where we fund for a desireable standard of living and grow our economy to meet the need. This may sound like Greece on this blog, but if you’ve worked with Hilary , you know she backs up what she says with the work ethic – talk about leading by example.

But the most interesting moment for me was in meeting an academic from the University of Warwick, Noel Whiteside. She has this homepage on the University’s website.

Noel speak to me of her outrage at how Defined Contribution pensions are weighted against women.

Her point was that statistically (we were in the hall of the Royal Statistical Society), most DC pensions are purchased by men for men. The cost of a joint life pension – one that continues to pay out to a spouse after the death of the purchaser is much higher and most men chose a pension that gives them jam today with nothing for the wife if he dies first.

And men die first (statistically).

It got me wondering how I’d feel if my missus bought a pension just for herself. I’d be  mortified (pun intentional).

In the olden days, before we could  chose the shape of our pensions, women got 50% of the man’s pension when the man died and in the rare instance that a woman got a pension in her own right, the cost of a surviving spouse’s pension was reckoned minimal (because men so rarely survive their wives (statistically).

Collective pensions (including the Dutch collective DC schemes, decide on how the pension is drawn and who gets what on a collective basis). This social pension  model would , assuming our society regards female welfare as as important as male, do much to address the imbalance observed by Noel.

And something has been done to give women a better deal in pensions. The Basic State Pension will be fairer for women and the EU directive on unisex annuities partly redresses the imbalance.

But the fundamental issue is that men purchase pensions that die with them and wives and long-term partners allow it. This seems to be through ignorance about how pensions work and is something that should be addressed right now.

Otherwise we will find a generation of underpensioned women whose situation is made dramatically worse when their husbands die.

This issue seems to be rather more than academic. Next time I bash a teacher, I will remember Noel, her mate Bernard Casey and the excellent focussed debates. Thanks to the sponsors – a brilliant event.


About henry tapper

Founder of the Pension PlayPen,, partner of Stella, father of Olly . I am the Pension Plowman
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5 Responses to This is no country for old women

  1. Martin says:

    This comes as quite a surprise to me. Naively I thought pensions more or less automatically provided for a spouse. So how many women would also be shocked to realise there was no continuing benefit after the death of their loved one?

  2. Ian Davidson says:

    I think, and I am happy to be proved wrong; that we need to be careful about how we mandate around this issue. The argument appears to be based around some assumptions that need closer attention. We live in a society where the model of male, female, children is increasingly (and I would admit from my viewpoint sadly) a minority sport. Even in the male/female family (what is the term for that, traditional, historic?) It is possible for the wife to earn more than the husband – understanding that statistically that is not as likely as the converse. Changes in differentials in longevity between the sexes is another issue. The large increase in “traditional” marriage breakdown also complicates the issue.
    My wife, who is several years younger than me, is in the NHS pension scheme, therefore does much better than I do with a number of DC pots scattered around. When (if) I retire my pension annuity will only be for me as my wife is very adequately provided for and despite earning less than me will likely have a higher pension. If I actually attempted to buy an indexed linked annuity on both our lives I would end up with a pittance – despite my estimated pension pot at retirement being in excess of a million – that is if the Government does not tax it out of existence and if my investment return is more than 1% real per year.
    I do not know the answer to the potentially valid points raised; pension savings are so uncertain and so subject to economics, politics and social change looking more than a very few years in to the future is fraught with difficulty.

    • Noel Whiteside says:

      Ian Davidson makes the point exactly: if (by any unfortunate chance) his wife dies before he does, he will inherit 50% of her NHS pension as of right. If he dies first, she will get nothing from his pension pot – which happens to be in excess of a million – because to provide for her means he ‘would end up with a pittance’. Nothing personal Mr Davidson, but I wonder how many men think like you do – whether or not the wife has a NHS pension. This is not a criticism of male attitudes towards pension savings, but to the very stupid assumptions currently underpinning policy that DC offers a realistic solution to the UK’s current pension problem.

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