How do we bridge the gender pension gap?

The All-Party Parliamentary Group on Women and Work heard yesterday about the plight of many women in their 60s who have not been able to contribute to their pensions sufficiently due to caring responsibilities.

A worried pensioner with her hands to her face


How do we address the problem many women in their 60s face in terms of pension poverty?

A session of the All-Party Parliamentary Group on Women and Work yesterday heard different suggestions on how to tackle the problem caused by the accumulation of different factors in women’s working lives – a greater likelihood of career breaks and part-time work for caring reasons, lower paid jobs and the gender pay gap.

While auto enrolment and the ability to top-up National Insurance contributions have helped narrow the retirement income pay gap between men and women for some, there is still a huge gap. This is compounded because, with the cost of living rising, many women are opting out of auto enrolment. There are also concerns that portfolio careers – doing several part-time jobs – and low pay generally mean many fall below the auto-enrolment threshold.

The meeting heard suggestions for a carers pension credit system or family carer top-up which would operate like tax credits and ensure contributions were topped up if women had to reduce their hours or drop out of work for caring reasons. Speakers suggested this ‘political fix’ for the future would be more likely to appeal to the Treasury than paying money out now. Pension experts recognise the nature of the problem and are preparing a campaign on carer pension credits.

Financial confidence

The meeting also heard from Sally Tsoukaris, General Secretary of the Civil Service Pensioners’ Alliance, about the big gap between women and men’s retirement income. She said women’s pension pot was around 69K pounds compared to 205K pounds for men. She mentioned the injustice of widows and widowers losing access to their partner’s pension if they remarry or co-habit, which she said affects women more than men. And she added that 38% of retirees have never checked their state pension forecast so may not even know that they have insufficient service to qualify for a state pension due to career breaks or part-time work as a result of caring responsibilities until it is too late.

Dr Vivien Burrows, Senior Research Fellow at the International Longevity Centre UK, told the meeting that women tend to save less because they have less. “They are doing what they can, but what they can do is not enough,” she said. She added that, although auto enrolment in private pensions to top up the state pension had been a success, lowering the threshold may not be enough to help women.

Another issue she highlighted is that more pensions these days are defined contribution pensions which means people have more choice over what they do with their money when they retire. Research shows, however, that women have lower levels of confidence over financial decision-making. Policies are needed to build that confidence, said Dr Burrows. She added that, in the absence of valuing informal care,  more flexible working options, including the four-day week, are needed to help carers balance work and their caring responsibilities.

The meeting also heard from the Centre for Ageing Better about the challenges older people face in terms of age discrimination when it comes to jobseeking and ageism generally. It has recently launched a campaign to highlight everyday ageism.

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