It’s the start of a new year and a time when many of us think about what we’d like to achieve in the next 12 months. But I wanted to look at areas where we’d like to see change. Last year there was a lot of focus on the fact it was 100 years since (some) women got the vote. It was also the first year that large companies had to publish their gender pay gap figures. But what about this year? Here’s SavvyWoman’s list of areas where we’d like to see change.
State pension age rises
It’s nine years since the state pension age rise to 65 began to be implemented. The state pension age for women and men is currently 65 and will be 66 by October 2020. You don’t need me to tell you that many women have struggled financially or had to make serious sacrifices, because of the state pension age rise(s).
It’s down to the speed at which the state pension age rose, the lack of notice, and the fact that most women didn’t have the same opportunity to build up a private or workplace pension.
In November, the campaign group Backto60 won the right to a judicial review on the state pension age rises and the hearing will take place in the High Court on June 5th and 6th. WASPI and other groups continue to campaign on this issue. The way women born in the 1950s have been treated by successive governments is shocking.
What we’d like to see: Hopefully, the judicial review will force the government to address the issue, although the legal route for getting redress is rarely a speedy one. Successive governments have had several years to help 1950s women affected by the state pension age rise, but have refused.
Make Universal Credit work for everyone, but especially women. Currently, the benefit is paid into one bank account where a couple claim it. This was introduced by the (coalition) government despite repeated warnings that this could harm women where there’s domestic or financial abuse or where there’s coercive control.
Last week the Work and Pensions Secretary, Amber Rudd, said that she’d change the payment system so that the one payment went to the main carer in the household. This is good news, but it doesn’t go far enough. People who claim Universal Credit can be sanctioned if they don’t make their appointments and there’s a high rate of sanctions among lone parents (90% of whom are women).
What we’d like to see: A wider review of the impact of universal credit on women. The Women’s Budget Group says that underlying problems with universal credit mean it can have a disproportionate effect on women’s finances.
The introduction of automatic enrolment has made a huge difference to the number of women (and men) who are paying into a workplace pension. If you earn more than £10,000 and you’re employed or you’re on a contract, you’re likely to be put into your employer’s pension scheme.
However, the £10,000 threshold applies to each job. Most part-time workers are women, and a number of women working part time have more than one job. But if you earn less than £10,000 from each job, you won’t be automatically enrolled into your employer’s pension scheme. Whereas if you earned over £10,000 from one job, you would. Those who aren’t automatically enrolled don’t build up their own pension, but they also miss out on their employer’s contributions into it.
SAVVY TIP: It’s worth knowing that if you earn less than £10,000 you can ask your employer to enrol you into the pension and they have to make contributions into your pension for you. As long as you earn more than around £6,000, you’ll still qualify. Find out how in my article.
The second issue around workplace pensions that some workplace pensions take employee pension contributions under what’s called a ‘net pay arrangement’. And this makes saving into a pension 25% more expensive for non-taxpayers.
Under the rules, you can pay up to £2,880 into a pension if you’re a non-taxpayer and you’ll still get tax relief as though you paid tax at the basic rate. But under the net pay arrangement, you don’t get this tax relief if you’re a non taxpayer. As more women than men are low earners, it affects more women. The government estimates that 74% of those affected are women. When the personal tax allowance rises to £12,500 in April (2019), it will affect more women. You can find out more about the different ways that tax relief on workplace pensions works, in my article.
What we’d like to see: We’d like pension providers, employers and the government address this issue. It cannot be right that low income workers effectively pay 25% more for their pension.
Child benefit changes
In January 2013, a rule change meant that couples with children where one partner earned more than £50,000 had to pay extra tax or opt out of getting child benefit. Once one partner earned more than £60,000, the tax was the same as the child benefit amount, so it wasn’t worth claiming child benefit.
There were two problems with this. One was that some women didn’t register for child benefit in the first place and so lost out on national insurance contributions for their state pension. The other was that couples who didn’t register to pay extra tax were charged a penalty.
Last November, HM Revenue and Customs said it would write off the penalty payments/fines of some couples who’d not registered to pay the extra tax. You can read more about this here. You can read more about child benefit changes – if you or your partner earns more than £50,000 a year, what should you do?
What we’d like to see: We support Sir Steve Webb’s petition for the government to change the rules to let women backdate claims for child benefit so they don’t miss out on national insurance credits for their state pension. However, we think more needs to change. At the moment, if one partner in a couple earns more than £50,000, they have to pay more tax if either partner claims child benefit. But if each earns £49,000, they don’t have to. The structure of this higher tax hasn’t been well thought through and we’d like it to be made fairer.
We’ve repeatedly highlighted problems around joint accounts where couples break down acrimoniously or where one partner runs up debt knowing that the bank can ask either partner to pay it off. We’ve called on banks to give couples a separate one-page summary of what taking out a joint account means. As things stand, only a few banks do this. You can read more about our campaign on joint bank accounts in this article.
What we’d like to see: we’d like all banks to make the rules on joint accounts much clearer – by giving customers a one-page summary of the rules of joint accounts. We’d also like banks to make it much easier for couples to close a joint account, especially in cases of financial abuse or where a break-up is acrimonious.
Financial firms and financial advisers are much more aware of the fact that women are interested in sorting out their finances. However, there’s more work to do. At the moment, many financial firms are still led by men and lots of firms have traditionally thought of their customers as being men.
What we’d like to see: we don’t want special treatment for women, but we do want financial firms and advisers to find out what women want. We’d like them to think very carefully about the language and jargon that they use and about company and product rules that may inadvertently penalise women. We’d also like the industry to be more upfront and transparent about charges and risks – and to explain these in plain language.
You can read my thoughts on what would get more women investing in my article.
Gender pay gap
The first gender pay gap figures were published last April and they didn’t make pretty reading. Many financial firms had sizeable gender pay gaps. This April we’ll get the second set of gender pay gap figures. Most firms have got a lot of work to do, so we’re not expecting miracles.
What we’d like to see: we think it’s important that firms don’t think of addressing the gender pay gap as a tick box exercise. Last year, a number of firms said that the reason they had a high gender pay gap was because they had more men in senior roles. That’s not a justification – that’s the problem! And it’s the problem that needs to be addressed.
You can find out which financial firms have the biggest gender pay gap in my article.
Shared parental leave/maternity rights
Every year, around 300,000 couples have the option of sharing their parental leave. However, figures suggest that as few as 2% of fathers who could take shared parental leave, do so. In some cases it will be because the father earns more. But many couples are unaware they have this option and other men may feel they can’t take this leave.
The bigger problem is that women are still being discriminated against when they are pregnant or after they have a baby. The campaign group Pregnant, Then Screwed estimates that 54,000 women lose their job every year because of pregnancy and maternity discrimination.
Pregnant Then Screwed wants to end the ‘motherhood penalty’. For example, it’s campaigning to extend the length of time someone has for bringing a discrimination claim. At the moment, a pregnant woman or mum has three months (minus one day) from the date the discrimination occurred to bring a claim. The group wants that extended to six months. It also wants flexible working options to be stated on job adverts and for both parents to have three months’ parental leave at 90% of their salary.
What we would like to see: we think that Pregnant Then Screwed have got the right idea. Let’s hope the government is listening…
Social care/Carer’s Allowance
As women, we are more likely to need care in old age but we have less money saved in our pensions. Successive governments have kicked the issue of social care into the long grass. Women are also more likely than men to get dementia in later life. If you need care and you don’t qualify for state help, paying for it can be incredibly expensive.
Not only that, but there’s no easy way to get access to information about how to pay for your care (or your parents) and what the options are. Most families are left on their own to make complex decisions in a time of crisis.
What we’d like to see: a grown-up debate about social care and who pays and a commitment from the government to fund social care properly. This is something that a number of high profile charities have called for, and their pleas have been ignored so far. However, we’d like to think the government can’t duck the issue forever.
We also think it’s wrong that some carers who mistakenly claim Carer’s Allowance are being prosecuted. Carers save the government huge amounts of money by caring for their family members. Many do so at great financial, emotional and physical cost to themselves. Carer’s Allowance isn’t means tested, it’s just that you can only receive it if you earn up to a certain amount. We think the government should be much more compassionate with people who’ve made a genuine mistake. You can read more about Carer’s Allowance – what it is and who gets it, in my article.
Child Maintenance Service
Both parents have a duty to pay towards the cost of bringing up their children. But the current system is failing many women who are the primary carers for their children. Groups like Gingerbread have campaigned over a number of years to improve the system. The government announced last year that it would make some changes, but there are still huge problems. If you want to get an idea of how women (and men) feel about the Child Maintenance Service – read these comments on the Gingerbread website.
What we’d like to see: put simply, a system that works for children and both parents. At the moment, far too many women aren’t getting much, if any, financial help towards the cost of their children.
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