Failure to offer mortgages and protection products to women who work part-time or are pregnant could result in prosecution under sex discrimination legislation warns the Equal Opportunities Commission.
Speaking exclusively to Money Marketing, EOC chief executive Caroline Slocock said the organisation would give backing to claims if providers distribute products in a way that discriminates against women.
Slocock says the EOC is aware of repeated instances where women are refused mortgages because they are pregnant, on maternity leave but intending to return to work. Women have also been refused payouts on protection policies because they do not work full-time.
Slocock says: “Women come to us all the time with these issues. Providers should look at their procedures and make sure they do not discriminate.”
In October 2000, Barclayloan Protection was told to pay £7,240 compensation and wipe out an original loan after it attempted to pay out on a payment protection policy because the policyholder had only worked part-time.
The claimant, backed by the EOC, successfully argued that such a policy discriminated against women because they were more likely to work part-time. Claims can be brought through the county court or sheriff's court in Scotland.
The EOC is raising its profile in the financial services sector with a range of policy initiatives, including a call for spouses to be required to get written consent from their partners before buying single-life annuities.
An EOC-sponsored amendment to the Pensions Bill filed by Labour MP Vera Baird was withdrawn earl-ier this month after the Government said it would look at ways of getting round the technical problems raised by the proposal. Slocock says the EOC will start fresh campaigning on the issue if it is not addressed in the House of Lords.
The EOC is concerned that while final-salary pensions are required to provide for surviving spouses, defined-contribution pensions are not. As the drift to DC continues, increas-ing numbers of widows -already the group least well off in retirement – will lose out as spouses choose single-life annuities, warns the EOC.
Slocock says: “We want progressive thinking applied here. We are not asking for a mandatory joint annuity but just making sure that both parties understand what is happening.”
She says the Government should not accept Alan Pickering's recommendation that mandatory spouse indexation of final-salary schemes should be abolished. “To take away support from women who may not have any other pension provision is not the right thing to do,” she says.
Slocock is also critical of the state pension system,saying it should be replaced by a universal citizen's pension based on residency. She says it discriminates against women because many women take time off work to care for children.
Slocock says: “You can pay in to state pension for just short of 10 years and get nothing out of it at all. Similarly, if you earn less than £77 a week in a job you do not get any National Insurance contribution, which discriminates against women. This all stacks up to a serious failing of the UK pension system.”
The EOC was one of the key opponents of the European Commission's plan to ban underwriting of insurance products on grounds of gender. This plan was dropped following a meeting of the Social Affairs Council of Ministers at the beginning of June.
It was the EOC which commissioned the research from the Pensions Policy Institute that concluded that banning gender underwriting would hit women on car insurance and reduce the income of some women who relied on their partner's annuity.
Slocock says: “We concluded that a ban on gender underwriting was not the right way forward as the PPI research showed that there would be no significant gains for women and that some groups would be worse off.”