A new report from the TUC calls for urgent action to address the gender pensions gap and shows the UK has an “unusually wide” gap compared to other OECD countries.
Closing the gender pensions gap should be an urgent priority for government with analysis showing that the UK has a worse problem than other countries across industries and with little or no progress being made, says the TUC.
Its new report, The gender pensions gap, was released yesterday for Gender Pensions Gap Day and comes as Labour has also released information showing the gender pay gap won’t close before 2050 for women in their 50s.
The report draws on research from the union Prospect that shows women have annual incomes that are £7,100 a year – or 40.5 per cent – lower than men. It points out the UK’s gap is “unusually wide” compared to other countries.
According to the latest figures from the Organisation for Economic Cooperation and Development the gender pensions gap in the UK was 40.5 per cent in 2015, compared to an average of 25.6 per cent across all member countries.
There is also little sign of any progress being made. The TUC says the gap has remained stable over the five years Prospect has been calculating it and that this year’s figure is actually slightly higher than the average gap of 39.6 per cent over the five-year period.
Although the gap affects all industries, the TUC says it is worse in manufacturing, wholesale and retail and other service activities, where it says women typically have less than a fifth of the pension wealth of men. In cash terms, it says, the gaps are largest in the industries dominated by public sector employment like public administration and defence, health and education. Women who are single mothers or divorced tend to be worst hit.
The report says tackling the gender pensions gap will require changes in three main areas: gathering better data; addressing the causes of the gaps, for instance, by improving the care infrastructure, extending shared parental leave and boosting flexible working rights; and making the occupational pension system work better for people on low pay so that inequalities in working life are not replicated or magnified in retirement.
When it comes to data, it calls on the Government to develop official metrics of the gender pensions gap and to consider mandatory reporting on it. The report also calls on the Government to require employer to publish action plans to explain what steps they’ll take to close gender pay gaps, with fines for those that don’t comply.
On pensions, the report calls for the removal of the lower earnings limit that lets employers make no pension contributions on the first £6,240 of a worker’s income; the phasing out of the £10,000 earnings threshold that excludes many low paid workers being automatically enrolled into a workplace pension scheme; encouragement for employers to continue contribution to pensions if a worker cannot afford to maintain their contributions; and a timetable for increasing statutory minimum employer contribution levels from 3 per cent.