Gender, Equality and Pension: What's at Stake for Women in Referendum (Brexit)?

(originally posted on June 17, 2016 on

AUTHORS: Annick Masselot (University of Canterbury), Roberta Guerrina, (University of Surrey) and Bridgette McLelland (University of Canterbury)

With the EU British referendum set to take place just one week from today, the campaigns have turned to social policy and social security issues. David Cameron warns that pensions will be greatly affected by Brexit. The counterclaim by the leave side is that EU has contributed to increase women’s retirement or pensionable age. This is a fairly complex issue that requires a detailed understanding of European and Member States competencies on issues of social insurance and welfare. So, “what is at stake” for women, many of whom have already seen their pensionable age increase in the last 12 months?

One of the issues that is often overlooked in discussions of pensions and social security is the importance of the principle equal treatment for men and women’s access to these schemes. This article will explore the responsibilities and obligations of the UK in relation to European provisions affecting pensions. This is an important issue, particularly in view of the recent controversy relating to the financial impact of increasing pensionable age for British women born in the 1950s.

It goes without saying that the principle of equal treatment is key to achieving gender equality. As obvious as this seems, the principle itself is rather complex in as far as it challenges structural and cultural barriers to achieving equality of outcomes.  It therefore seems counter intuitive that the principle of equal treatment should disadvantage women and their relationship with the employment market in relation to pensionable age. So, is it true that the introduction of this principle within European legislation led to inequitable outcomes?

The story begins with the adoption of Council Directive 79/7/EEC that addresses equal treatment in relation to statutory social security matters. The Directive specifically required Member States to ensure that there is no direct or indirect discrimination whatsoever on grounds of sex by the end of 1984. As the UK did not have at that point implemented national provisions relating to equal treatment in statutory social security schemes, the Directive directly shaped the nature and scope of gender equality laws in the area of pension in the UK.

As is made clear by early rulings by the Court of Justice of the European Union, however, the responsibility of ensuring equal treatment after this date often fell on individuals directly affected by the State's failure to correctly transpose the Directive - if transposed at all. This was particularly so in the UK in relation to benefits regarding invalidity. A fairly significant body of case law in this area clarifies further the scope of European legislation and the obligations of Member States in this regard.

From a technical perspective, while Article 4(1) of Directive 79/7 enshrines the principle of equal treatment, Article 7(1)(a) allows for exceptions to the overall principle when applied to setting pensionable age. It specifically acknowledged that changes in State pension need to be gradual and are the responsibility of Member States. In interpreting the scope of the exclusion, the Court of Justice of the EU held that such “discrimination” was necessary in order to achieve the overarching objectives of the Directive. The exception for the difference in pensionable age was considered to be a temporary, in order to enable States to adapt their pension system progressively without disrupting the complex financial equilibrium of that system. Discrimination concerning contribution periods, which are necessarily linked to the determination of pensionable age, was therefore held to fall within the exclusion, as to hold otherwise would render the derogation ineffective. However, it was always the case that eventually, pensionable age was going to be become equal.

Directive 79/7 certainly played an influential role in shaping the UK statutory social security system. It resulted in the removal of various forms of discrimination in order to ensure a progressive move towards gender equality. As to the issue of discrimination regarding pensionable age, the UK Pensions Act 1995 provides for the equalisation of pensionable age, which is set to increase to 65 for both sexes in 2020, gradually increasing to 68 thereafter . While the increased pensionable age may not fit comfortably with popular understandings of how to advance gender equity, an equal pension age fulfils a key requirement of in relation to the principle of equal treatment.

If we look at the wider socio-economic context, it is worth noting that the gender pay gap in old age is twice as large as the pay gap between men and women engaged on the labour market. This in turn means that women are at higher risk of poverty in old age.  Of course, EU provisions have influenced UK social security legislation, ensuring equal treatment in both statutory and occupational schemes. However, the rise in the pensionable age should be seen more as a consideration of national financial policy rather than the consequence of EU regulation.