Skip to content

Brought to you by

Dentons logo

UK People Reward and Mobility Hub

The latest updates in employment, benefits, pensions and immigration

open menu close menu

UK People Reward and Mobility Hub

  • Home
  • Events
    • Past events
  • Who We Are
    • Meet the team
  • How we can help

Mind the retirement gap: the gender pension gap explained

By Eleanor Hart
April 11, 2022
  • Pay, benefits and bonuses
  • Pensions
Share on Facebook Share on Twitter Share via email Share on LinkedIn

On 4 April 2022, the government published a briefing paper detailing written evidence from the Trade Union, Prospect, to the Work and Pensions “Saving for later life” inquiry, which highlighted that the gender pension gap is “significantly larger than the gender pay gap, and applies to a large (and growing) proportion of the female population”. Whilst definitions of the concept vary, as the gender pension gap does not refer to a specific measurement, it is generally used to set out differences in retirement outcomes for men and women. Many definitions include a comparison of the retirement incomes of men and women and, despite varying estimates, it is clear from reports that the difference in these incomes is greater than the gender pay gap.

It has been reported that the gender pension gap is much larger for private pensions than state pensions, and commentators cite three main causes for this, and for the gap itself, being:

  • Factors in the labour market: it is noted that women are more likely to spend time in part-time employment, or not in employment at all, to undertake primary care responsibilities. This has an impact on the gender pension gap due to the fact that people do not generally contribute to private pensions when in periods outside the labour market, and with the salary threshold for auto-enrolment currently £10,000, those in part-time employment may not meet the criteria to be automatically enrolled by their employers.
  • Pension system designs: the design of auto-enrolment into a workplace pension in the UK widens the gap between lower and higher earners in retirement and puts those with more than one job at a disadvantage.
  • Demographic differences: women tend to live longer than men, so are more in need of making their retirement savings last longer.

Proposals to reform auto-enrolment legislation by 2026 in order to extend the criteria and lower the earnings threshold, and the age at which workers are eligible for auto-enrolment, could help to decrease the gap as more employees will be eligible who would otherwise not have been [1]. Other proposed reforms to cut the gender pension gap include more provision of affordable childcare for pre-school age children. Employers could also provide part-time workers with more information about their options to contribute to a pension, even where the individual would not otherwise be eligible for auto-enrolment. Additionally, the awaited introduction of pension dashboards could help to make pensions more accessible for workers. With the reforms to auto-enrolment still to surface, it will be some time before we see any potential impact of these on reducing the gender pension gap. However, it is clear from the briefing paper that the government is shining a light on the disparities.


[1] See our earlier blog on the extension of the auto-enrolment criteria here.

Share on Facebook Share on Twitter Share via email Share on LinkedIn
Subscribe and stay updated
Receive our latest blog posts by email.
Stay in Touch
Pay benefits and bonuses, Pensions
Eleanor Hart

About Eleanor Hart

Eleanor advises on a broad variety of pension matters, both transactional and general advisory, acting for trustees and corporate sponsors. She has extensive experience advising clients on the pension and employment aspects of acquisitions and disposals (both UK and cross-border). She has been involved in numerous high-profile deals with complex pension aspects as well as innovative pension restructurings, including the first ever pensions deficit for equity swap. Eleanor is a member of the Association of Pension Lawyers and is currently on the Education and Seminars Committee.

All posts Full bio

You might also like...

  • Discrimination
  • Employee benefits
  • Employment contracts
  • Pay, benefits and bonuses
  • Sickness absence
  • Unfair dismissal

Is it safe to dismiss an employee who is receiving long-term disability benefits?

The EAT has dealt a blow to employers, confirming that the purpose of permanent health insurance and similar schemes would […]

By Laura Morrison
  • Pensions

Gilt market volatility – important actions to consider for defined benefit pension scheme investment strategies

By Eleanor Hart and Emma Holder
  • Employee benefits
  • Legislation
  • Legislative Changes
  • Pay, benefits and bonuses
  • Proposed Legislative Changes

Pension auto-enrolment expansion backed by DWP

By Eleanor Hart and Alan Cronin

About Dentons

Dentons is designed to be different. As the world’s largest law firm with 20,000 professionals in over 200 locations in more than 80 countries, we can help you grow, protect, operate and finance your business. Our polycentric and purpose-driven approach, together with our commitment to inclusion, diversity, equity and ESG, ensures we challenge the status quo to stay focused on what matters most to you. www.dentons.com

Dentons boilerplate image

Twitter

Categories

Dentons logo

© 2023 Dentons

  • Legal notices
  • Privacy policy
  • Terms of use
  • Cookies on this site