"The impact on women varies significantly across the generations, and depends in particular on the extent to which they have been able to save for retirement during their lives," said Brigitte Miksa, pensions expert at Allianz. "And although, in the past, men had fewer gaps in their working lives, in the future, poverty in old age will probably cease to be a problem predominantly affecting women."
Statistically: Marriage at 29, divorce at 43
According to the study, fewer marriages, a rising number of divorces and an increased life expectancy fundamentally increase the risk that women of retirement age will have exhausted their financial resources.
In 1970, the average marriage rate in the OECD countries was still more than eight marriages per 1,000 people, but forty years later this had fallen to five. However, this does not necessarily mean that fewer people are entering into partnerships, but in any case, more and more people are deciding not to get married, according to Allianz.
At the same time, the divorce rate followed a common trend in the OECD countries: In Germany, for example, it almost doubled between 1970 and 2010 - from 1.3 divorces per 1,000 people to 2.3. Statistically, German women get married around the age of 29, their marriages last for 14 years, and they get divorced at the age of 43.
Life expectancy is increasing at the same time. Again taking the German example, a German women's life expectancy at birth is approximately 83 years according to UN estimates. If we also take into account the current trends in the development of life expectancy, such as those brought about by medical progress, Germans - both women and men - will live much longer in the future than they do today. The Max-Planck Institute for Demographic Research in Rostock assumes that, in 2070, a life expectancy of 100 years will be the norm, according to Allianz.
In the future people will, therefore, have to save for a much longer retirement than was the case in the past. In view of this, a divorce can affect women very differently, depending on their generation.
The study concludes that, in the past, women from older generations were particularly vulnerable to a divorce, especially those who had perhaps never undertaken paid work, had no training, and whose career history mainly consisted of raising children and caring for relatives. Thus, in 27 of the 30 OECD countries, older women are at significantly greater risk (15 percent) of experiencing poverty in old age than men are (11 percent). The situation varies greatly in western Europe, and also depends on the safety nets provided by the different welfare states.
In contrast to this, today's 50 or 60-year-olds are comfortably off. Women in industrialized nations today are far better educated than their mothers were. They usually work, and thus save for their retirement provision themselves. They are entitled to social benefits, and can accumulate their own assets. Women's increasing economic independence is particularly important for those without financial support from a partner.
Women in their 20s can also provide for themselves financially today, as they work and are paid more fairly than women were in the past. However, opportunities for young people are increasingly limited, either due to the financial crisis, which means it is harder to make profitable investments, due to a high youth unemployment rate in many countries, or due to rising levels of personal debt.
In the future, according to the study, poverty in old age will probably not remain a problem primarily affecting women. Men who, for instance, have not undertaken work subject to compulsory statutory pension insurance for their entire lives, could even find themselves worse off than women, as could men who have been married and divorced several times and have a number of wives and children to support.
"Taking care of your own financial situation provides protection against this. It is important to be well-informed, and to constantly build up retirement provision throughout your entire life, to ensure that even a difficult situation such as a divorce does not eat away at your retirement provision in the long term," Miksa said.
The above was published by The FINANCIAL in March.