Many inches have been written on the UK’s gender pay gap in the past year, including on this blog. However, little attention has been given to the gender pension gap.
New analysis from the trade union Prospect on UK household incomes suggests the gap between men’s and women’s pension income is almost 40 per cent (or around £7,000). To give some context, that is more than twice the current gender pay gap, which according to the latest Office for National Statistics figures is now 17.9 per cent for all employees.
The main reasons commentators have given for this gulf are unsurprisingly similar to those for the pay gap itself. The fact that significantly more women than their male counterparts perform part-time work has been highlighted as the main contributing factor. Those in part-time work tend to progress up the career ladder more slowly and are less likely to see pay increases year upon year and thus contribute less to their pensions. Of course there will also inevitably be a lag between the closing gender pay gap and the pension gap, as women reaching retirement age in the coming years will still have had on average a lifetime of reduced contributions to their pension pot.
In order to prevent workplace economic inequality continuing into retirement, Prospect’s report has recommended the following actions from government:
- statutory requirement for the Department for Work and Pensions to report annually on the gender pension gap;
- positive recognition of caring responsibilities in the state pension system;
- a new Pension Commission;
- abolishment of the automatic enrolment earnings trigger;
- credits for people who opt out of receiving child benefit; and
- tax relief for low earners in net pay pension schemes.