This is no country for old women

henry tapper

13 years ago

I 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).

HOW WRONG I WAS!

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.