THE Government will shortly lay before parliament regulations implementing long-awaited reforms to the basic state pension. These changes will give women and carers a weekly National Insurance credit for substantial periods of time spent caring. Parents of children under 12, carers of disabled children and adults and foster carers will benefit.
Ministers earned the praise of sex equality campaigners when the changes were included in the 2007 Pensions Act. For the first time, caring was given the same status as paid work. We know that the unequal impact of caring roles is one of the biggest drivers of the gender pay gap. It determines women’s earning power, career choices and ultimately their pension pot. Only 35 per cent of women currently retire with a full basic state pension. So these changes are a huge step forward.
But look closely at who qualifies and who doesn’t. If a mother stays at home to care for her child, she will get a weekly credit towards her pension. However, if she returns to work and her own mother provides the childcare, the grandmother will get nothing. It is the same child. The grandmother has enabled the mother to return to work where she, in turn, will probably pay tax and National Insurance. She will increase her family income, perhaps reducing child poverty. Her use of grandparental childcare means she won’t be claiming childcare tax credits, because informal childcare doesn’t qualify. Meanwhile, the grandmother may have given up work or reduced her working hours in order to do this. If so, her own pension provision is likely to suffer. The cruel irony is the person who cannot get the credit towards her basic state pension is also the one who is most likely to be facing the imminent prospect of poverty in retirement.
Many of us will know grandmothers in this situation. They are the invisible backbone of family life. There is no official data telling us how many working age grandmothers (it is overwhelmingly grandmothers, because men have unbroken contribution records) are in this situation. Their invisibility is so complete that no one in Government has thought to find out. But it will probably run into the hundreds of thousands. We know that grandparents are the single biggest source of childcare for working families. At least half of all lone parents rely on grandparents if they return to work. The success or failure of welfare reform actually depends on them. The average age at which people become grandparents is 49. That’s more than 15 years before the current state retirement age. If Labour is serious about closing the pensions gap for women,
then including this army of carers in pension reform is a minimum requirement.
Backed by a cross-party group of more than 50 MPs and rising, Baroness Hollis and MP Anne Begg are leading the way in Parliament to persuade the Government to think again. This campaign is about core Labour values of social justice, equality and fairness. The principle has already been won. Now it’s time to finish the job.
Sam Smethers is chief executive of Grandparents Plus
About The Author
