Family Ties: Women's Work and Family Histories and their Association with Incomes in Later Life in the UK

Abstract

This article examines the relationship between the family and work histories of older women and their personal incomes in later life, using retrospective data from the first 15 waves of the British Household Panel Survey. The association between women's family histories and their incomes later in life are relatively weak, explaining only a small proportion of the overall variation in older women's incomes. Divorce, early widowhood and re-marriage are not associated with any significant differences in older women's incomes, while motherhood is only associated with a small reduction in incomes later in life. While there are significant differences in the work histories of older women with different family histories, this translates into relatively small differences in their personal incomes, because the types of employment career pursued by most women are not associated with significantly higher retirement incomes and because public transfers dampen work history-related differentials, especially for widows. On the one hand, this could be seen as a positive finding in that the ‘pension penalty’ associated with life-course events such as motherhood and divorce is not as severe as often anticipated. On the other hand, the main reason for this is that the pension returns to working longer are relatively low, particularly for women with few qualifications. The analysis suggests that women retiring over the next two decades are unlikely to benefit significantly from the additional years they have spent in employment, because most of this increase has been in part-time employment. The article highlights the tensions between two objectives: rewarding work, and protecting the most vulnerable, such as carers, long-term disabled and unemployed. Resolving this dilemma involves moving away from a close association between pension entitlements and work history and towards universal entitlement based on a citizen's pension.

Exploring the private pension gender gap and occupation in later working life

“…The numbers of years in full-time employment and years employed from age 40 to 55 have a strong impact on women's entitlement to a PP (Ginn and Arber, 1996). Having worked full-time in their 50s also has a strong beneficial effect on women's retirement at University of Sussex Library on June 5, 2016 wes.sagepub.com Downloaded from income (Sefton et al, 2011). This effect is probably linked to the penalties incurred in final salary schemes for those who retire or reduce their hours prior to the normal retirement age and also to the increase in women's PP membership over time (Sefton et al, 2011).…”

“…Having worked full-time in their 50s also has a strong beneficial effect on women's retirement at University of Sussex Library on June 5, 2016 wes.sagepub.com Downloaded from income (Sefton et al, 2011). This effect is probably linked to the penalties incurred in final salary schemes for those who retire or reduce their hours prior to the normal retirement age and also to the increase in women's PP membership over time (Sefton et al, 2011). Working part-time over 50, often triggered by care responsibilities, has detrimental effects on pension savings (Evandrou and Glaser, 2003).…”

“…Other socioeconomic trends, however, may have sustained this gap. Women have retained the bulk of responsibility for family care and much of the growth in female labour force participation has been in part-time employment (Sefton et al, 2011). In addition, there is differentiation in the occupational pension scheme arrangements that men and women are able to access, because they tend to work in different occupations (McKay et al, 2000).…”

Privatisation and pensions: what does this mean for women?

“…However, in some respects, DC schemes may be more suitable to women as they are more portable. Women's careers are more often characterised by movement between jobs and in and out of employment (Sefton et al, 2008). DB schemes typically operate with a one 60th principle for each year of service up to a maximum of 40 years, with a maximum income of two thirds of final salary in retirement (Gough, 2004).…”

“…Despite improvements in part-timers' access to occupational pensions in European law, they are less likely to belong to a pension scheme than full-timers even when they have equivalent qualifications. Part-time employment is often concentrated in low-status employment; only 22% of women in managerial or professional occupations work part-time compared with 70% in unskilled occupations (Sefton et al, 2008). Having children increases the chances of participating in part-time employment and having time out of employment.…”