1 THE PENSION GAP AND POVERTY OF ELDERLY WOMEN July 2008

2 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.

3 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.

4 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 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

5 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%)

6 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 EU % in NMS %! Higher differentials: Sweden, Austria, Germany, Finland and Ireland; Latvia, Lithuania, Estonia, Slovenia and Cyprus. Low differentials: Netherlands, Luxembourg, Denmark, Portugal and Slovakia. Phenomenon in new member states?

7 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!

8 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. Elderer - poorer!

9 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

10 Average wages * Source EUROSTAT, gross data ** Gross data

11 Average pensions * Gross **Net

12 BELGIUM: 24% of retired 65+ women live in poverty AUSTRIA: people SPAIN: men, 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 65+ living below the poverty line

13 Retired 65+ people at risk of poverty Percentage of 65+ retired persons at risk of poverty. Data Integration 2007 EC, EUROSTAT

14 Key findings 1.Labour market conditions and the final outcomes of pensions systems are clearly related. 2.Especially in the case of women’s 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.

15 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. Women’s average insurable income is 85% of men’s and about 89% of the national average.

16 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. Food for thought

17 THANK YOU!