Impact of the economic crisis on older women in the UK 1 The impact of the economic crisis on older...

Impact of the economic crisis on older women in the UK

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The impact of the economic crisis on older women in the UK

Extraordinary Meeting of the FERPA Women’s Committee

6 and 7 September 2010

Marion Wilson Chair of Women’s Working Party, NPC member of Pensioners Committee TUC

Janet Shapiro member of Women’s Working Party, NPC


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Events

• Financial crisis UK in recession late 2008

• Coalition Government of Conservative Party and the Liberal Democrats, UK election,

May 2010 • Budget cuts proposed

July 2010• Comprehensive Spending Review

October 2010


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The challenges we face• Demographic changes

• Financial crisis & the growing national deficit -

these fuel arguments for public spending cuts & reduction of public sector.

Such measures are unwiseUK already has wide inequalities.Public spending cuts impact disproportionately on vulnerable groups BUT increasing income tax would impact more fairly.


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Before crisis and after

Situation for older women prior to 2010

according to:– demographics, life expectancy– statutory retirement age (SRA)– poverty, Basic State Pension (BSP)– healthcare – comfort – social inclusion

How will the government measures affect older women?


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General demographic changes• 12m men & women over SRA• 60% are women. • Average woman’s life expectancy is 81.8

(men 77.7)• Life expectancy rising until 2021

• The poor have lower life expectancy - between 4 and 7 years less.

• Gap between rich & poor is widening


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Wide inequalities in UK

Life expectancy gap 'widest since Great Depression'

The poorest people in Britain are twice as likely to die before the age of 65 than the richest - the highest

inequality in mortality since the economic depression of the 1930s.

Research carried out at Sheffield and Bristol universities

Gap wider for women The gap between life expectancy in the poorest areas and the national average has widened by 7% for men and 14% for women since the baseline was set.

National Audit Office


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Statutory retirement age (SRA)

• Currently 65 for men and 60 for women• UK government and EU green paper

advocates raising the SRA rapidly, working towards parity of SRA for men & women

Raising SRA has big impact on:- vulnerable groups with lower life expectancy,

- those in hazardous employment, - manual workers.


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Poverty in retirement

The poverty threshold is defined as income equivalent to 60% of median male income

- currently £171 per week

Basic State Pension (BSP) £97.65, Pension Credit £132.60

single person rates per weekPension credit is means-tested

• BSP - 30.8% of average working pay, lowest in EU• 300,000 more pensioners became poor in 2009, • 2.5m pensioners are poor.


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Basic State Pension (BSP)

Changes announced in July 2010• The BSP will rise according to the Consumer Price

Index, a lower rate than the Retail Price Index.• The CPI will also be used for second pensions and

some private sector pensions.

effectsWomen receive lower yearly increases in their BSP and other pensions.The Institute of Fiscal Studies – challenges use of CPI– reports that groups most reliant on benefits suffer

disproportionately


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Women’s working lives Working women gender pay gapHourly Pay: Full-time: women 82% of men’s pay Part time: women 60% of men’s pay Median weekly earnings

£426 women £531 menWomen are:

36% of all full-time 75% of all part-time workers

Employment interruptions:Mothers’ FT employment rate is 60% of childless women’sMothers’ total employment rate is 29% of childless women’s25% of women aged 45 -64 are carers

Proportion in work - women 68.9% men 75.5%


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1.6m women pensioners are poor -why?

• 70% did not qualify for full BSP lacking contributions

• Gender inequality & part time employment lead to lower pensions

• Low income while working leads to 23% of single female pensioners having no savings.

Budget cutswill cause recession that will cut employment where women’s jobs are concentrated:– 38% public sector (Labour Force Survey)– ~25% are in service industries


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Health in retirement

• 23% of working aged people are permanently sick or disabled 1.

• 47% of retired people are disabled or suffer from a chronic condition 2.

• One quarter of those aged between 50-64 and two thirds of those aged over 85 have a long-term illness or disability including dementia

• More women suffer from mental illness

References 1 & 2 given in notes


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Healthcare and social services

• Medical care free & provided by NHS

• Personal care at home is means-tested & provided by local authorities.– Variable and inadequate, so that 80% of those

in need of care at home do not get it from the state

• Residential care– Residential care is mean-tested

Any cuts to social services will impact more heavily on older women.


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Care at home (domiciliary care)

• Rationing of services leave some without help. • Only those with high care needs qualify. • Relatives and friends provide unpaid care• 1.2m men and 1.6m women over 50 are unpaid

carers• 24% of all carers aged 75 and over provide 50

hours or more a week of informal care. • The vast majority of these are older women

Any cuts in social services will impact heavily on older women as patients and carers.


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Policy changes in health care

• A list of ‘low priority treatments’ constrains clinical decisions across England. (the list includes treatments needed by older women)

• Cuts in funding announced by new government - will reduce bed numbers.

NHS White Paper July 2010• Parliament will decide in the autumn whether to

approve radical changes to the NHS that transform its structure and increase private provision.

It is likely that these changes will make women’s health care worse.


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Policy on long-term care

• Before the General election the previous government made a proposal that would have given free care at home to 400,000 in long-term care.

• That has been stopped and the money is being used to fund cancer medication.

• The new government’s commission on funding for care does not include the option to fund it through general taxation.

Older women are already receiving inadequate care. Those who cannot afford to pay are at risk.


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HousingHousing already inadequate with insufficient sheltered provision

33% of older households in England fail the decent homes standard & are poorly insulated.

Budget cuts• Entitlements to housing benefits to be

capped ― Affects older women- more older women than men live

with adult children.― Affects black & minority ethic (BME) group –BME

women tend to live with larger or extended families.

• VAT to rise from 17.5% to 20%– Bigger proportionate tax on lowest income quintile

(~2% loss in income)– Home repairs will be less affordable


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Keeping warm

Existing situation• 3m pensioner households spend more than 10%

of their income on fuel bills. • More than 36,000 older people died of cold-

related illnesses in the winter of 2008/2009, but last winter was colder.

• Winter fuel payments are currently £250 to over 60’s, £400 to over 80’s.

Budget cuts• Older women are left with less money to pay fuel

bills.• Annual winter fuel payment may be paid later to

those reaching raised SRA.• Annual winter fuel payments may be reduced or

frozen.


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Social inclusion or exclusionExisting situation for getting

out and about – 3.5m living alone– 12% of older people unable to get out– Some over 75 have difficulty accessing shops,

post office, doctor’s surgery and local hospital.– car ownership falls from over 70% to just 42%

for those over 65– Older women less likely to own and drive a

car.– Older women more dependent on public

transport.


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Existing situation for public transport

• Public transport is de-regulated, subsidies are patchy, thus fares are expensive.

• Following pensioner lobbying, since April 2008, pensioners are entitled to a free annual bus pass giving free off-peak travel on local buses anywhere in England.

• Some cities have an extended scheme

that allows free travel on trams, trains etc.


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Concessionary travel

Budget cuts mean:• Funding for concessionary travel insecure

under threats to local authority funding.• Passes may be means-tested.• Cuts to bus services at off-peak times; this

is when older people use them.• The age of entitlement will rise with the

official retirement age.Neil Duncan-Jordan, a spokesman for the National Pensioners Convention, said: “The ones who will really lose out are women. They would have retired at 60 and got a free bus pass, but now they will have to wait for both.”


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Keeping active & well

Risk factors for those over 65– getting out and about more difficult– participation in the arts drops from 65% to

50%.– 7 out of 10 over 65s have never used the

internetBudget cuts mean:

– Loss of subsides for adult education – many courses have closed

– Funding cut for concessionary swimming– Funding cuts for voluntary groups supporting

community groups


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Impact of budget cuts on womenThe Fawcett Society

is posing a legal challenge, claiming thatno impact assessment has been carried out as to how budget

proposals will affect men and women differently.

~ 72% cuts in women’s incomes, ~ 28% in men’s (according to research by the House of Commons library,

commissioned by shadow minister Yvette Cooper)

ALSOPublic sector is targeted for pay freeze - projected net losses of 600,000 posts.

65% of public sector workers are women38% working women are in public sector jobs

85.4% of civil service part-time jobs filled by women

2.9 million women (1.9 million men) affected by housing benefit reform


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Impact of budget cuts on women

TUC: ‘Women and recession: one year on’

Female employment was relatively unaffected in earlier recessions, because a large proportion of women’s employment is in the public sector with better job security.

NOW• Severe cuts in public spending will badly affect

working women.• Premature spending cuts will risk double dip

recession.• Recommend making economic growth a priority

and preventing sweeping spending cuts.


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NPC - Lift older women out of poverty

The most straightforward way to do this would be to follow NPC recommendations to:

• Increase the BSP for all existing pensioners (regardless of contributions) to £171 per week in 2010

• Index the basic and second state pensions annually to average earnings, the Retail Price Index or 2.5% whichever is the greater.

• Retain the State Second Pension (S2P)

• Avoid means-testing as used in Pension Credit


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NPC funding suggestions

Finance is available for a BSP of £171 per week:

• £54bn in the National Insurance Fund; collected for pensions as part of the pay-as-you-go system.

• Raise £10bn - abolish the Upper Earnings Limit of £43,888 on National Insurance (NI) contributions.

• Increase employers’ contributions to NI by a further 3%

• Raise £37bn by reforming tax relief on private pensions. – top1% of taxpayers receive around 25% of the rebate, – average employee receives just £330 a year.

• Collect unpaid tax - At least £25bn a year is currently uncollected in taxation, mainly from large

corporations and businesses.


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Concluding remarks

Public spending cuts & reduction of public sector impact disproportionately on all vulnerable groups -

that includes older women.

‘To protect public services, support working women and ensure the economic recovery is sustained the TUC is clear that sweeping cuts must be prevented.’

Women and recession: one year on. TUC


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We must continue to campaign with NPC, TUC and European groups.

Impact of the economic crisis on older women in the UK 1 The impact of the economic crisis on older...

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