Around 1 in 6 women are currently ineligible for automatic enrolment into a workplace pension despite women’s employment rate being almost 72.7 per cent, the highest since records began, according to NOW: Pensions.
According to a new report by NOW: Pensions, by the time women reach retirement age 65, they will have an average pension of £69,000, £136,800 less than the average man, who will have saved £205,800 over the same period.
Only 27 per cent of women, compared to 45 per cent of males, work largely full-time throughout their careers. Furthermore, women spend an average of 10 years away from the workforce to start families and care for children and relatives, contributing to both the gender pay and pensions gaps by presenting fewer opportunities for career progression and higher salaries.
Additionally, over 5.8 million women or 38 per cent work part-time, which means they may not reach the £10,000 eligibility requirement for automatic enrolment in their workplace pension.
NOW: Pensions chair of trustees Joanne Segarsat says: “It is now a decade since auto-enrolment was launched and it just proves what a powerful tool inertia has been to get over 10 million new savers into auto-enrolment.
“However, it is by no means a perfect picture as almost the same number of people (10.4 million) are currently ineligible. Women make up the biggest proportion of part-time workers in the UK and with reduced hours comes reduced pay. Millions of women have not been able to save via a workplace pension, nor take advantage of their employer contributions and the tax relief.
“Pension policies and regulations have not kept pace with how many of us now live and work, especially since the Covid-19 pandemic. That is why we have been lobbying the government to fix these inequalities and enable ‘under-pensioned’ groups the same opportunity to build their retirement pot as others enjoy.”
Flex Appeal founder Anna Whitehouse says: “Flexible working is the number one way that we will close the gender pay gap. So, the idea that women are being penalised in later life by the gender pensions gap for working flexibly and therefore being able to work at all is exhausting.
“If women did not work flexibly and take on caring responsibilities, the economy would crumble. That this additional penalty is falling on women when they are at their most vulnerable is beyond cruel. We need to start supporting women; we need to level the playing field, and we need to start to close these gaps before things get any worse.”
Pregnant Then Screwed founder Joeli Brearly says: ”We will only close the gender pension gap when women have equal access to the labour market. Our outdated parental leave system ensures that it is almost always women who take time out of the workforce to care for their children and this unequal share of the care work continues for many years.
“Meanwhile, we have the most expensive childcare in the world as a proportion of a mother’s earnings, resulting in hundreds of thousands of women reducing their hours or leaving the workforce altogether as it doesn’t make financial sense to continue working. If the Government were to invest in childcare and parental leave, we would undoubtedly see the gender pay gap and the gender pensions gap reduce, resulting in fewer women and families living in poverty.’’
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