Why the gender pension gap is stuck

How did we arrive at a situation where women retire on average with pension savings of £69,000, compared to £205,000 for men [according to Now: Pensions]?  And what can we do to make a difference, given it has barely changed in recent years?

Debora Price, Professor of Social Gerentology at the University of Manchester, told the CHASM [Centre on Household Assets and Savings Management] annual conference on Thursday, that the gender pension gap is not well studied, at least not until recently and particularly in comparison with the gender pay gap. Research on the pay gap began in the mid-19th century, she said, and is now well embedded with policy tools developed to counter it. It is now on companies’ agendas and there are well established lobby groups. Nevertheless, although it has been decreasing, not much progress has been made since 2011 and particularly not for working mums, she stated. 

We know the reasons – women working reduced hours, taking career breaks, gender segregation in the workplace, different values, caring responsibilities, the motherhood penalty and the fatherhood premium, glass ceilings and sticky floors, the rise of insecure work and discrimination. The solutions that have been put forward, said Professor Price, seem to put a lot of the onus on over-stretched women – to assert themselves more, to train more, to not take career breaks, to do more ‘male’ jobs and so forth. She called many of these ‘totally unrealistic’.

But gender pay gaps affect lifetime earnings. She said that, in choosing to focus narrowly on current salary, researchers are looking at a part of the problem that will not resolve the lifetime earnings issue.

Progress, but not enough

Professor Price said that there has been hardly any research on the gender pension gap until very recently, but it is growing. There has been some progress with auto enrolment. There has been legislation on pension sharing after divorce, but still pension sharing only happens in 11% of divorces, said Professor Price, and even when it is only shared 50/50 in a fifth of cases.

She added that there are now more pressures on women to take action on an individual basis to ‘do better’. The cumulation of the research findings suggest, for instance, that women should invest more or not experience any trauma, not work for sexist or racist bosses, have good childcare, be white etc if they want to have a lower gender pension gap.

What’s more, she said, there is little mention of gender in key sociology texts on economic wealth. Yet, men’s work continues to be almost always better paid than women’s and wealth accrues more wealth so the inequality grows.

For Professor Price, we need to look at the issue on a systemic level and the state needs to intervene to address the cumulative advantages of being male because, although women have come a long way, they are currently stuck.

Calling for a new gender revolution, she said we need fresh, emboldened conversation about the role of the state when it comes to benefits, state pensions and taxation.

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