The gap between men’s and women’s pensions continues to widen according to new analysis by Now Pensions.
According to their research the average man saving into this master trust had £424 in savings in 2017, while the average women had £334 – a difference of £90.
However by 2018 this “gender pensions gap” had grown to £126, with men have an average savings pot of £559, while women had £433 saved.
These figures were based on an analysis of Now Pensions 1.7m members.
The master trust provider called for the government to address “inequalities” within the pension system to try to reverse this trend. It says that removing auto-enrolment £10,000 trigger, and the lower earnings band would increase the pension savings of many low-paid and part-time workers – the majority of which are women.
It added that the gender pay gap is likely to widen this pensions pay gap in the years ahead.
This analysis shows that in 2017 average woman’s pensions savings were worth 78.5 per cent of the average man’s pot, but by 2018 this percentage had slipped to 77.4 per cent.
As a result Now Pensions said that women make up 43 per cent of its customer base, but only own 37 per cent of the fund in monetary value.
The master trust provider says it was highlighting these figures to coincide with new data being published on gender pay gaps.
By March 31, employers with 250 or more employees will have to publish their gender pay gap data for the second time as part of a mandatory requirement which came into effect in 2017.
Now Pensions’ analysis suggests that for those earning an average salary, in 40 years’ time, pension pots will have grown to £50,514 for men yet just £40,332 for women.
This follows auto enrolment minimum contributions and takes into account mean salaries for men and women over their working lives. If a five-year career break is applied, this figure falls to £33,986.02 for women – leaving their pension pot 33 per smaller than men.
Now Pensions director of communications Amy Mankelow says: “The gender pay gap not only affects women’s working lives but leaves them more vulnerable to poverty in retirement.
“Women’s pension savings face a double whammy, as women typically earn less and are more likely to work part time and take career breaks to care for children or elderly relatives.
“Auto enrolment does little to address this inequality as millions of women are prevented from saving altogether as they earn less than the £10,000 auto enrolment trigger. This means that a large proportion of part-time workers, who are much more likely to be women, don’t have the opportunity to save in the first place.”
She adds that the fact that auto enrolment minimum contributions remove the first £6,136 of earnings from the auto enrolment calculation also hits the savings of more women than men.
“We are calling on the government to remove the £10,000 auto enrolment trigger and get rid of the lower earnings band to give more women the opportunity to save for their retirement.”
According to a Pensions Policy Institute report, commissioned by Now Pensions, over three quarters (77 per cent) of employees earning less than the auto enrolment trigger are women.
In addition over 50 per cent of part-time workers earn less than the auto enrolment trigger and 81 per cent of part-time workers are women.
The report estimates that 3 million individuals would become eligible for auto enrolment if the earnings trigger was removed.