Pensions and the Extending Working Lives Agenda in the UK: The Impact on Women
The Extending Working Lives (EWLs) agenda has become a key policy response in the UK and the European Union to the challenges posed by an ageing population. Life expectancy has increased significantly since the 20th century, with men living an average of 79 years and women 83 years in the UK (ONS, 2020). These demographic changes have prompted concerns about the sustainability of public pensions, leading to policies aimed at extending working life, such as raising the State Pension Age (SPA). These measures are intended to reduce state expenditure on pensions by keeping people in the workforce longer.
The EWLs Policy Landscape
The UK government has promoted EWLs as a way for individuals to achieve financial security in later life, emphasising individual responsibility for retirement. While these policies are framed as providing freedom of choice, the reality is more complex. Not all individuals experience EWLs equally; factors such as financial circumstances, health, caregiving responsibilities, and job opportunities significantly shape a person’s ability to extend their working life. This is particularly true for women, whose working lives tend to be more fragmented and part-time due to caregiving roles.
Gendered Challenges in EWLs and Pensions
EWLs policies, such as increasing the SPA and reducing early retirement options, disproportionately affect women. Many women have shorter, less continuous working lives due to their traditional roles as carers. This makes it harder for them to accumulate the necessary National Insurance (NI) contributions for a full state pension, leaving them with lower retirement income than their male counterparts. The reforms linking pension benefits more closely to earnings over a lifetime reinforce these inequalities, further disadvantaging women who have spent time out of the workforce.
While some women may benefit from working longer to build up their pension, many face structural barriers that prevent them from doing so. Caring responsibilities for children or elderly relatives, as well as poor health, can make it impossible for some women to continue working, despite policy expectations that they should.
The Impact of Pension Reforms on Women
The UK pension system has undergone major reforms, with the introduction of the Single-tier State Pension (STP) in 2016, replacing the Basic State Pension. Under this system, individuals must have 35 years of NI contributions to qualify for the full STP. While low-paid women with a full contribution record may benefit, many women, especially those with gaps in employment, will struggle to meet these requirements. Women are also more likely to be affected by auto-enrolment rules for private pensions, as many do not earn enough to qualify or work part-time jobs that exclude them from contributing.
Policy Solutions
Addressing these gendered inequalities in pensions and EWLs requires collective policy measures rather than relying solely on individual responsibility. Policies must account for the caregiving roles that disproportionately fall on women and the barriers they face in continuing to work later in life. Potential solutions include adjusting NI credit systems to better support carers, enhancing pension flexibility, and increasing access to benefits for those unable to work longer due to health or caregiving commitments.
Without such changes, the current pension and EWLs policies risk perpetuating gendered inequalities, leaving many women with inadequate financial security in retirement.
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