‘Gender pension gap’ requires action by employers, campaigners say
Pension campaigners in East Anglia say steps must be taken to address the “gender pension gap” so future generations of women are not disadvantaged.
Research released this week showed young women could end up with a workplace pension pot 10% smaller than their male counterparts, due in part to the gender pay gap which has been uncovered among UK firms and women taking time off to care for children or relatives.
Fidelity International, which carried out the study, said UK employers had to “address the personal, professional and policy barriers stopping women from investing”.
The report said women could close the gap by investing an extra 1% of their salary in a private pension early in their career – but some have called for a solution which puts less onus on women.
Alistair McQueen, head of savings and retirement at Norwich-based insurer Aviva, said women faced a “triple whammy” on pensions – with lower average earnings, longer life expectancy, and less confidence in managing their finances.
But he said measures were being taken to rectify the gap, including to auto-enrolment pension schemes. “There was a design in that which was arguably detrimental to women, in that you have to be earning more than £10,000 a year to be enrolled, but the government says that by the mid 2020s they will remove that threshold,” he said.
“Another solution, something Aviva has done, is joint parental leave, in part designed to balance the system. We will support fathers to take paid leave if the mothers want to keep working, to try not to make childcare an inevitable challenge in a woman’s career.”
Mr McQueen added that a change to the state pension to remove its income-based element should also help to even the odds.
Debbie de Spon, of the Norfolk branch of Women Against State Pension Inequality (WASPI), believes the problem will persist for younger women.
“Many women born in the 1950s worked part-time because we didn’t benefit from the support that is available now for women to get back to work after having a baby,” she said.
“There was therefore less of an opportunity for women of our age to accrue a private pension. “But the situation is still much the same today – women will be the child-bearers and carers and will take time off work and that will affect their ability to stack up a private pension.”
WASPI Norfolk branch member Joy Scott said: “Many women of my age never got the chance to go into a private pension. A lot of us used to work part time and even if you are working full time the gender pay gap created a scenario where we had limited funds to put into a pension.
“A lot of young people are put into pension schemes from the start now but we were not given that option.”
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