Generations of women could be facing poverty in old age because they cannot afford to save for retirement. Women's Editor Christen Pears reports.

RETIREMENT should be a time for enjoyment and relaxation but for many women it brings only the prospect of financial hardship and misery. Twenty-four per cent of single female pensioners are currently living in poverty - and the situation is unlikely to improve for younger women unless the Government takes drastic action.

The problem is historical. The pension system is based on the post-war model of male breadwinner and female carer and simply does not meet modern women's needs or take into account their career patterns.

Earlier this year, Age Concern and the Fawcett Society, a group dedicated to women's equality, launched a campaign to close the pension gap. Let's Make Pensions Work for Women is demanding a state pension for everyone, free from means-testing, and paid at a level that would cover basic costs.

Vera Baird, Labour MP for Redcar, was closely involved in the development of the campaign and is raising the issue of women's pensions in Parliament. During a debate last month, she told the House of Commons that, based on current progress, it would be 80 years before women had equal pensions to men.

The discrepancy is partly due to inequalities in pay, which mean women receive much smaller pensions.

Mrs Baird says: "When the Equal Pay Act was introduced in 1970, women were earning on average two thirds of men's salary. Thirty-three years later, it is five sixths. Things are progressing too slowly.

"The Government's attitude is that women are working more, we're getting better pay, and that equality will eventually trickle down. If they don't do more to intervene, it will be five generations before men and women have equal pay and equal pensions."

A recent study carried out by Age Concern and the Fawcett Society found that only 30 per cent of women are confident they have a good pension. Even among 25 to 34-year-old-women, one in five said they were relying on their partner for a pension. Married female pensioners receive just one third of the income of their partner and, according to government figures, only 49 per cent of women qualify for the full state pension, compared with 92 per cent of men.

To qualify for the full state pension, men must have paid National Insurance (NI) contributions for 44 years and women for 39. Many women rely on the state pension but it is often impossible for them to make the necessary contributions.

There are a number of reasons why women lose out. The pension system rewards long working lives but because of childcare responsibilities women spend fewer years in the labour market.

Many women work part-time and have no access to company pension schemes and insufficient earnings to qualify for National Insurance contributions. And even when they do work full time, women earn less than men. Without children, a woman of average skills can expect to earn £241,000 less than an equivalent man over a lifetime. It is estimated that if she had two children, she would lose a further £140,000.

Some groups of women face particularly severe disadvantages. Single parents have problems due to their caring responsibilities and spending commitments. Just three per cent of Pakistani and Bangladeshi women currently have an occupational pension, while asylum seekers suffer because the system rewards time spent in the UK labour market.

Joyce Lamb, a 54-year-old secretary from Consett gave up full-time work to look after her two daughters.

She says: "At the time, I don't think I realised what an effect it would have on the state pension. I've always worked but because it was only part-time, I didn't earn enough to make NI contributions. It just doesn't seem fair."

Her daughters are now grown up and she has gone back to work full-time and is paying £60 a month into a private pension scheme. She says: "It isn't going to be a huge amount when it matures but if I didn't pay, I would have virtually nothing and I would have to rely on my husband. Women need to be more aware of the problems they face and there has to be some provision for their pensions. Everyone deserves a decent retirement."

Since the late 1970s, women who take time off work to bring up children or care for close relatives can qualify for Home Responsibilities Protection, which safeguards National Insurance Contributions and pension entitlements, but the system is rigid and many women still miss out. It also fails to take into account the thousands of women, currently in their fifties, who missed out on the protection.

Many of these women also elected to pay the married woman's stamp, a reduced rate of NI contribution, which does not give them a pension in their own right.

Mrs Baird says: "A lot of women don't feel they were informed properly in the 1970s when they made the decision. It was really a case of, 'You're a married woman, pet, and you don't need it. You'll get it off your husband'. The Government is pretty resolved it won't do anything about the women who haven't paid the full stamp as it would be unfair to those who have, but there are other issues we can campaign on."

She is demanding a cut in the amount that people are required to earn before it counts towards their state pension and for the earnings from part-time jobs to be added together so women with more than one job could count them towards their pension.

"I know lots of women in Redcar who have more than one job because they need to fit work around looking after the kids," says Mrs Baird, "but if neither job is above the minimum earnings level, they don't get a stamp. It's completely discriminatory against part-timers, who are mostly women."

Mrs Baird would also like to see the introduction of a Carers Credit to help women - and men - who take breaks from work to look after children or elderly or disabled relatives.

The MP is now a member of the Commons Select Committee on Work and Pensions and she is urging fellow members to launch an investigation into the issue of women and pensions.

"There has been progress but there is a massive amount to do," she says. "We are a government that is quite forward thinking and committed to equality, but leaving a legacy of it being five generations before women have equal pensions with men is unthinkable."

* For more information, visit www.fawcettsociety.org.uk or www.ageconcern.co.uk or telephone 08457 009966.

A Fair Deal For Women

A Fair Deal For Women is campaigning for measures that will:

1. Guarantee that every woman, whether in employment, caring or unable to work for reasons such as disability, receives a decent state pension that covers basic costs and is not means-tested.

2. Introduce a comprehensive, flexible and fair system of credits that covers caring for children and older people.

3. Include more low paid women in the National Insurance System.

4. Make all state pension contributions count.

5. Improve opportunities for women to build up decent pensions through company or personal schemes.

6. Close the gap with better financial education and affordable advice.