At work and after – how independent do we want to be?

This seems to me very sound. Jo Cumbo rightly reports the gender pension  gap in retirement while Jo Grady concludes that pensions reflect pay and the pay gap is lifelong.

It’s not as simple as all that – as Andrew Warwick-Thompson points out
AWT 6 But it’s still pretty simple….! Women are dependent on men for equal lifestyles. The question in my mind is whether that is a satisfactory state of affairs.

The State Pension should be a leveller.

The idea of a first pillar state pension – the Old Age Pension as some of us still call it, is that it pays a minimum wage to everyone and it’s based on citizenship. You get it if you are the CEO of a FTSE 100 company, you get it if you’ve been out of work all your life. You should get the same as a man or a woman.

Having spent a few days dancing on the head of a pin over GMP equalisation, I am all too aware that fairness is a very imprecise concept. To be “totally fair” is a very costly business (as companies will find out when the GMP equalisation bill hits the mat).

WASPI is not about fairness, but about promises and what was understood by them. Even if the WASPI women got all they desired , the fundamental inequalities between women and men’s retirement income would remain. For though the idea of a first pillar pension is based on a flat pension for all, in practice it still has elements of earnings related pensions within it and many women chose to opt-out of some pension accrual because – as woman – they could.

The State Pension should be a leveller, going forward it will be, but the inequalities of the past cannot be simplified, either in GMP or in the State Pension.

Society’s debt to those who do not earn

The problem with money is that it only rewards certain forms of economic activity. We cannot earn money for bringing up children or caring for our parents or for doing voluntary work – that’s because these endeavours are not rewarded with a wage.

The state pension is supposed to reward these endeavours by giving people credit for paid work they did not do while doing other unpaid things. And of course it provides a safety net for those who were unable to find paid work and ended up without much endeavour at all. Strictly speaking people who opted out of work on a voluntary basis should not be rewarded by a single state pension but we let that inequality through as we do many others, that’s a societal thing.

In place of self-sufficiency, society has created a concept of limited dependency. Women are expected to be dependent on men to a degree as part of the life-long commitment of marriage. Marriage’s break down and divorce settlements are supposed to replace dependency with a financial payment to recreate self-sufficiency for both parties. The State Pension is supposed to do that to.dependent 2

Self sufficiency or limited dependency?

So long as we do not reward mothers for mothering and carers for caring, we accept the concept of limited dependency. Far more women are dependent on men than the other way round. Increasingly women will be dependent on women – especially where gay relationships include children.

There is a lag between the changes in which we choose to live our lives and the change in the compensation between one group and another. That is because the concept of limited dependency lives on within structures like pensions even after other areas of society have moved to self-sufficiency.

Much of the vehement argument about inequality needs to be understood in the context of this lag.

I am a little old-fashioned in believing, as a man, that I have a responsibility to those who have dependency on me. I own  that I have both a social and personal responsibility for my family’s welfare. Socially, were I not to meet my commitments , I would be deemed irresponsible; personally, were I to let loved ones down by not meeting my financial promises, I would feel guilt and a lack of self-worth.

I know many women who have assumed exactly the same responsibilities, now being the main bread-winners in the family.

But there is still a lag in the gender pay gap and so long as we don’t reward motherhood and caring, then I suspect that there will continue to be a pension gap too – not least because all private pension provision is earnings related.

So we go forward with a system that accepts inequality in terms of pay and rations on the basis of personal and social responsibility to make sure those who are not supported by direct wage in retirement, get that support in other ways.

The  question is whether this fudged way of doing things is acceptable, or whether we seek to equalise in a more fundamental way. This is the question for all gender pay discussions but it is a question for pensions too.

It’s one I currently have no answer to. I may be groping towards a terms of reference to think about it more clearly. I’m pretty sure, it will take a longer lifetime than mine before this issues finds resolution.


About henry tapper

Founder of the Pension PlayPen,, partner of Stella, father of Olly . I am the Pension Plowman
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4 Responses to At work and after – how independent do we want to be?

  1. Brian G says:

    I agree with your sentiments. However we also need to fund such changes. Whilst we live in a society which perpetuates a tax system which continues to maintain the wealth of the few there is little hope that inequality will reduce, whether that be based on gender, class, opportunity or education. The old boys network remains in rude health, penetrated only by the occasional entrepreneur.

  2. henry tapper says:

    Thanks Brian, I am not arguing for a perpetuation of the status quo, just wondering how fast we can move away from dependency, I suspect the answer’s “not as fast as I’d like”

  3. Dave C says:

    You could really do with simplifying this blog entry into a paragraph or two.

    From what I can tell you’re trying to say women should get paid more state pension to balance the fact they tend to have babies and so miss out on lifetime earning potential?

    That gross lifetime earning differential is the ‘pay gap’?

  4. DC says:

    “Women are dependent on men for equal lifestyles. The question in my mind is whether that is a satisfactory state of affairs.”


    I always wonder if you consider a single female and a single male working the same job, for the same term etc., what would the actual ‘gap’ be? Clearly it should be zero, and in reality it probably is close to negligible.

    When people choose to start families, one party or the other will have to compromise some of their earning potential (assuming all things remain the same) to accommodate the time spent on what they CHOSE TO DO OF THEIR OWN VOLITION.

    Why should taxpayers have to subsidise people for their life choices? Should childless/ men/women feel bad that they have more time to spend on their careers, with the potential to either retire earlier or have a longer career?

    It can’t come as a surprise to anyone with above room temperature IQ that LESS PRODUCTION should come with LESS REWARD.

    Why is this never fully reflected in the ‘gender pay gap’ stats?

    Really that seems to be the case for the vast majority of occupations: that women and men are compensated equally for their production, experience, success etc. If someone is going to take years out to look after kids, or return on reduced hours to suit their needs THEN YOU HAVE EXCHANGED TIME WORKING FOR TIME LOOKING AFTER YOUR FAMILY. This is obviously a fair compromise. I don’t expect to get the time I spend working back, I get compensation from my employer but I don’t get THAT SAME TIME with my kids.

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