A new government report – the first major government report on the subject – highlights the extent of the gender pensions gap.
The gender pensions gap stands at 35%, according to the first major government report on the issue, although that figure doesn’t include those who have no pension wealth when they reach retirement age.
The report says there has been progress since 2006. Between 2006 and 2008 the gender pensions gap was 42%. Auto-enrollment [AE] for pensions has played a significant role. Indeed the gap for those who are eligible for automatic enrollment is currently 32%.
AE has increased the number of lower paid workers paying into workplace pension schemes and was phased in for different sizes of employers between 2012 and 2017. In 2021, 4.8 million more men and 4.4 million more women paid into a workplace pension compared to 2012. Of those, a million men earned between £10,000 and £20,000 per year in real terms compared to 1.8 million women. Nevertheless, bringing more lower paid women into pensions savings can increase the gender pensions gap.
The report says that, while the gender pensions gap due to a range of factors, including AE, median female pension wealth at minimum retirement age has increased in real terms since 2006 to 2008.
In 2006 to 2008, the average woman had £50,000 of real terms uncrystallised private pension wealth at age 50 to 54. This compared to £85,000 for the average man. By 2018 to 2020 this had increased to £94,000 for the average woman, compared to £145,000 for the average man. The report says this is a real terms increase of 90% for the average female compared to an increase of 70% for the average male.
A recent TUC report called for urgent action to close the gender pensions gap and said analysis showed that the UK has a worse problem than other countries across industries and that little or no progress has been made in recent years.The TUC says the gap has remained stable over the five years the union Prospect has been calculating it and that this year’s figure is slightly higher than the average gap over the five-year period.
It 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.
*workingwise.co.uk produced an action plan on gendered ageism, including all the issues that together contribute to the gender pensions gap. It can be accessed here.