So why is this and how can we help to fix it?

Even if you’re confident your own pension will be sufficient, you may have a mother, grandma, sister or friend who is close to retirement or has reached State Pension age and is finding her finances a challenge. If you read on you may be able to help her.

 The main reasons why women have lower levels of pension savings than men tend to be:

• Caring responsibilities: The unequal division of caring responsibilities means women are much more likely to take time out of work or work part-time, making it harder to build up a workplace pension. 
• Auto-enrolment: Employers do not have to auto-enrol workers who earn less than £10,000. Because more women than men have to fit in working hours around caring duties, it means many are earning below this threshold.
• Gender pay gap: The impact of women earning less than men because of the gender pay gap. Men typically earn 15.8% more than women in the UK.*  

So what can you do to boost your pension income both before and after retirement?

Your workplace pension

Auto-enrolment: Employers don’t have to enrol you into a pension if you earn less than £10,000 a year.  But if you earn £6,240 or more a year, and are aged between 16 and 74 (tax year 2022-23), you do have the right to join a pension scheme (but not necessarily an auto-enrolment scheme) and can ask your employer.

Register for a myFund account and follow our guidance: If you’re a member of the BTP and haven’t yet reached retirement age, we hope you’ve registered for a myFund account and regularly use our planning tools and follow our guidance, so you can help to ensure you do have enough money to live on in later life. If not, then register NOW!

Additional Voluntary Contributions: If you’re lucky enough to already have a workplace pension, you could think about putting in more with Additional Voluntary Contributions (AVCs). This is an easy, tax-efficient way to save more towards your retirement. See BRASS - AVCs

Your State Pension

This is a regular payment from the government once you reach State Pension Age, which is currently 66, with further age increases set out in legislation. You need a minimum of 10 years' National Insurance (NI) contributions or credits to get any State Pension, and at least 35 years’ to get the full amount. The quickest way to check if you’re eligible for State Pension and how much you might get is to go to https://www.gov.uk/check-state-pension

Even if you do qualify, State Pension, on its own, is unlikely to give you a very comfortable life in retirement. Although the full level of the new State Pension is rising to £203.85 per week from April 2023, the latest Retirement Living Standards figures show that you’ll need a minimum of around £246 per week (£12,800 per year) if you’re a single person, to cover your basic needs.

Boosting your State Pension

National Insurance (NI) credits

It’s worth checking to see if you can get NI credits for times when you were claiming benefits and unable to work. See How National Insurance Credits can help boost your State Pension. You can also find out more and check if you’re eligible for NI credits at https://www.gov.uk/national-insurance-credits

Child benefit and National Insurance

If you’re a parent or carer of a child under 12, you should automatically get NI credits if you claim Child Benefit.

Transfer of NI credits

If you’re working and getting Child Benefit, you might be building up more NI credits than you need. But you can transfer these to your partner if they’re not working or are on a low income and not paying NI contributions.

Grandparent credits  

If you’re under State Pension age and looking after grandchildren or relatives’ children more than 20 hours a week, they can transfer their Child Benefit credits to you so you can build up your State Pension.

Child Benefit and tax charges

If you, or your partner are high earners, you might choose not to apply for Child Benefit because of the extra income tax you’ll be charged. But it would still be a good idea to apply for it. Even if you decide not to take the payments, you’ll be registered and so will get NI credits which will count towards your State Pension. You’ll find more details on NI credits and the State Pension at Child Benefit and the State Pension from the MoneyHelper website.

Voluntary National Insurance contributions

If you still don’t have enough NI credits to qualify for the New State Pension, and are aged between 45 and 70, then you may be able to pay voluntary NI payments back to 2006, to make up for gaps. But after 31 July 2023, you will only be allowed to backdate missing payments by up to 6 years. So you should fill any gaps before this date.

The deadline was originally 5 April 2023, but this was extended on 7 March until 31 July 2023 to give people more time. Check https://www.gov.uk/government/news/taxpayers-given-more-time-for-voluntary-national-insurance-contributions.

If you're already claiming State Pension 

Pension Credit

Pension Credit is a benefit for people who are over State Pension age on lower incomes. According to MoneyHelper, 1 in 3 people who are entitled to it don’t claim it. It can be worth up to £3,500 per year. You can find out if you qualify by visiting https://www.gov.uk/pension-credit/eligibility

Attendance Allowance

Attendance Allowance is a benefit for people over State Pension age who need help because of illness or disability. The money you receive isn't means-tested – so your savings or income won't affect your claim. Claiming also won't affect any other benefits you receive. Go to https://www.gov.uk/attendance-allowance to see if you qualify and to put in a claim.

Women’s underpaid State Pensions

Some married women and widows may have had their State Pension underpaid and thousands are believed to be due an average of £6,000 back. Married women who hit State Pension age before April 2016, including widows and divorcees – and the over-80s, whether married or not – should check if they're owed.  You can visit Pension Service at GOV.UK or call the Pension Service on 0800 731 0469 for more information.

*Figures from Prospect Union