THE PENSION GAP AND POVERTY OF ELDERLY WOMEN

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THE PENSION GAP AND POVERTY OF ELDERLY WOMEN

• July 2008

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The worning facts

• Recent research shows that without ongoing
  reform, by 2050 the proportion of people aged
  over 75 living at risk of poverty could be 30 or
  more in all but a handful of EU Member States,
  with older women worse off than men.

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Why are women poorer?

• This applies particularly to women due to their
  traditional lower representation within paid work
  and to the fact that their opportunities to
  accrue full pension rights have often been much
  lower.
• This reflects societal gender roles and is
  compounded by a lack of opportunities in both
  training and education, contributing to lower
  incomes in work and higher levels of poverty in
  retirement amongst women.

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Cruel facts differences

• Difference in work patterns
• 80 of part timers are female
• 60 of mothers work part time, vs. 4 of
  fathers.
• More than ¼ of women aged 45-64 provide unpaid
  care for elderly or
• Disabled people.
• Almost one third of women reduce their labour
  market activity as a direct result of caring.
• Women are likely to live alone during retirement
• Over 40 of women aged 65 are widows
• More than 2/3 of women aged 80 or older are
  widows.
• 60 of women over 75 live alone.
• High likelihood on reliance on survivor benefits.
  
• Increased risk of dependence on means tested
  benefits

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Where the highest risk?

• With the exception of Cyprus, all EU Member
• States with high relative poverty risk belong
  to EU15
• Ireland (40)
• Spain (30)
• Portugal (29)
• Greece (28)
• UK (24) 

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Phenomenon in new member states?

• In EU15 risk of poverty is 19 - twice as high as
  NMS10 where is
• much lower - 9
• In the majority of countries, the poverty risk is
  clearly higher for
• elder women
• in EU15 - 21
• in NMS10 - 10! 
• Higher differentials Sweden, Austria, Germany,
  Finland and Ireland Latvia,
• Lithuania, Estonia, Slovenia and Cyprus.
• Low differentials Netherlands, Luxembourg,
  Denmark, Portugal and Slovakia.

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Risk lower in former socialist countries? Not
for a long

• In 2003, the at-risk-of-poverty rate (after
  social transfers) was in the EU 5 percentage
  points higher for older women (20) than for
  older men (15).
• In Germany the at-risk-of-poverty rate in 2003
  for women aged 65 and over was 13.7, compared
  with 8.2 for men.
• In the Czech Republic, which has a
• relatively low poverty level, women run only a
  2 higher risk than men, but this increases as
  they reach 75 and older!

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Elderer - poorer!

• In all countries included here, women aged 75
• had a notably higher poverty risk.
• One out of every three women aged 75 had
  experienced a poverty risk in Austria, Finland,
  Belgium, UK, Greece, Portugal and Ireland.
• Germany and Italy had little or no poverty
  differential for women in two age groups.

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Legal minimum pension
source SPC Special Pension Study, minimum income
provision for older people and their contribution
to adequacy in retirement, December 2006, EC
Social protection website
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Average wages
Source EUROSTAT, gross data Gross data
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Average pensions
Gross Net
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65living below the poverty line

• BELGIUM 24 of retired 65 women live in poverty
• AUSTRIA 230 000 65 people
• SPAIN149 000 men, 1 697 000 women
• CROATIA 40 of the population living in poverty
  risk zone (10 bellow poverty line), as earning
  less than 260 Euro
• HUNGARY 50 of the retired people, as receiving
  less than 244
  Euro per month
• IRELAND 27.1 of the retired people, 3.3 in
  constant state of poverty
• UK forecast by 2050 50 of future pensioners
  may receive incomes below the official poverty
  level
• ITALY 5 million at risk of poverty, of which 3
  million women

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Retired 65 people at risk of poverty
Percentage of 65 retired persons at risk of
poverty. Data Integration 2007 EC, EUROSTAT
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Key findings
1.Labour market conditions and the final outcomes
of pensions systems are clearly
related. 2.Especially in the case of womens
poverty, the issue of care credits (recognition
of periods of time out of paid work for caring
responsibilities such as looking after children
or elderly relatives) is becoming increasingly
important. 3.The wage gap between genders is
something that should be looked at, as is gender
segregation of the labour market. 4.There
appears to be a trend towards providing less
generous basic pensions, but covering a higher
percentage of the population.
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What is guilty

• WAGE GAP leads to PENSION GAP
• The main factor behind the current pension gender
  gap is the lower remuneration of female workers,
  due to widespread sectoral and occupational
  segregation. Womens average insurable income is
  85 of mens and about 89 of the national
  average.

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Food for thought

• Retirement age and length of pension
  contributions - gradual increase in retirement
  age reached 63 years for men in 2006 and will
  reach 60 years for women in 2009
• Pension formula pension reforms widen gender
  pension gap
• Gender wage gap part-time working, career
  patterns and discriminating types of occupation
  and employment
• Women represent in the EU 59 of all tertiary
  graduates but they still do not reach the best
  positions in the economy for several reasons!
• Work/life issues women still take the burden on
  private and family responsibilities.

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• THANK YOU!