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Guest Blog: Why do older women in Scotland experience further financial inequality?

Women experience high levels of pension inequality, due to women’s care responsibilities, part-time work, occupational segregation, the gender pay gap and maternity and gender discrimination at work, reducing women’s access to both state and private pensions. In this guest blog, Louise Brady from Independent Age explores the links between state pensions and gender inequality, what we can learn from the Older People’s Economic Wellbeing Index, and what needs to change.

The income gap that exists for women in Scotland during their working lives doesn’t end when they reach State Pension age. It persists - with lower wages, inadequate social security payments and time out of the recognised labour force due to caring responsibilities all negatively impacting savings, pensions and overall finances as women grow older.

It’s unacceptable that 96,782 pension-aged women in Scotland today live in poverty, with many more living just above this threshold.

The UK State Pension and gender inequality

The full amount of the UK’s new State Pension (paid to those who turned State Pension age after 2016) in the last financial year was just over £11,500 or £221.20 per week. On average, the weekly amount of new State Pension received by women in Scotland last August was around £5 less than men (£211.22 compared to £216.30), and £10 less per week than the maximum amount (or £520 less annually).

To get the maximum weekly payment amount, older people need to have paid 35 years of National Insurance contributions based on full-time work. According to the latest Scotland Census, women who are currently working are almost 4 times more likely than men to be in part-time jobs. Going by current rules, many of these women will receive less than the maximum amount of the new State Pension when they reach pensionable age.

However, it’s important to note that most older people (63%) in Scotland, including 70% of women, receive the pre-2016 State Pension instead (often referred to as the ‘old’ State Pension). The maximum amount for this is even lower – for financial year 2024/25 it was £169.50 per week or £8,814 a year.

While the rules and detail for the old State Pension are complex, the gendered income gap here is clear. The latest available data shows that last August only 77% of women in Scotland on the old State Pension received the full weekly amount, compared to 97% of men.

The Older People’s Economic Wellbeing Index: Scotland 24-25

When looking at the drivers of poverty among older women in Scotland, the income gap that extends from working age to pension age is central. At Independent Age we recently published research which found that 68% of women in Scotland receive a pension from a former employer, compared to 75% of men. And while 26% of men receive income from a personal pension, this falls to 17% of women.

Our research can be found in the Older People’s Economic Wellbeing Index: Scotland, 2024-25, the first of an annual series of nationally representative polling of people aged 66 and over in Scotland, designed to gain a further understanding of the financial wellbeing and lives of older people.

The Index highlights the experiences of pensioners in Scotland who are more likely to live in poverty, including people with caring responsibilities, people who have a disability or health condition, renters, and unsurprisingly, women.

Shockingly, one quarter (24%) of older women reported having an income of less than £15,000. This is compared to 13% of men.

Older people were asked about the actions they’d taken as a result of financial difficulties, with the results revealing that women more likely than men to report that they occasionally skipped meals (13%; 9%), at least occasionally reduce the quality of their food (28%; 22%), frequently or always cut back on heating or utilities (23%; 17%), and frequently or always reduce their social interactions (14%; 11%).

The poll also looked at the experiences of one-person pensioner households, a group which is disproportionally made up of women (about 70%). Official statistics show that 22% (one in five) women above the State Pension age who live alone also live in poverty, compared to 16% (one in seven) of one-person male pensioner households.

What needs to change

The results from our first Older People’s Economic Wellbeing Index: Scotland provide further evidence on the persistence and impact of the gendered income gap for older women. For next year’s edition of the Older People’s Economic Wellbeing Index to show improvements across all areas, urgent action is needed.

The Scottish Government should introduce a strategy to tackle pensioner poverty by using devolved powers as far as possible. The UK Government needs to ensure that reserved social security entitlements, including the State Pension and Pension Credit, are set at an adequate level.

Policy makers across both Parliaments need to consider the reasons why some pensioners are more likely to live in poverty than others. Addressing the inequalities women face during their working age lives, and ensuring the social security system is adequate and affords a decent standard of life is central to reducing pensioner poverty, and the disproportionate impact of it that is experienced by women.  

You can read the first Older People’s Economic Wellbeing Index from Independent Age here.

If you’re over State Pension age and struggling financially, you can find information from Independent Age on their website or you can call their Helpline on 0800 319 6789. To hear more about Independent Age’s policy and public affairs work in Scotland, please contact Scotlandpublicaffairs@independentage.org.

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