Women have £7k less in their pension than men

Women have £7k less in their pension than men

The pensions gender gap has increased to 39.9 per cent in 2017/18, representing a gap in retirement income of £7,000 between women and men.

According to Prospect's Tackling the pensions gap 2019 report, published today (August 5), the figure compared with a gap of 39.5 per cent in 2016/17.

The union, which based its analysis on data from the Department for Work and Pensions family resources survey, stated that it is “hugely disappointing that the recent gradual improvement in this benchmark for pension inequality has gone into reverse”.

Between 2014/15, when it stood at 41.6 per cent, and 2016/17, the pensions gender gap was improving, according to previous analysis from Prospect.

The union identified the main causes for this discrepancy could be attributed to an inequality in the average level of state pension awarded to men and women.

The pensions gender gap is also affected by the impact of women taking breaks from paid employment or reducing hours to look after family, and the cumulative impact over time of women earning less on average than men.

Among a set of measures to reduce this inequality, Prospect is calling for a statutory requirement for the government to report to Parliament on the gender pension gap, and its plans for tackling it.

The union has launched a petition on this topic on the Parliament website, which at the time of writing had more than 1,200 signatures.

When the petition receives 10,000 signatures, the government will respond and if it gathers 100,000 signatures before January 31, the petition will be considered for debate in parliament.

Prospect is also calling on the government to give an additional state pension credit worth £2 a week for each year that someone is not working because they are looking after children under the age of 12, and the introduction of measures that make affordable childcare more widely available, so that people who want to return to work can do so.

On auto-enrolment, the union is asking for the new auto-enrolment rules to be introduced, and that an independent commission to consider the appropriate level of contributions is created.

In December 2018, DWP published its long awaited auto-enrolment review, which announced a series of measures the government was looking to implement.

This included lowering the age of workers auto-enrolled into workplace pension schemes from 22 to 18 years and calculating contributions from the first pound earned, instead of the current £10,000 lower earnings threshold.

However, these changes will only by introduced in the mid-2020s.

A concerted campaign to encourage higher take-up of credits that can boost women’s pension income  and changes to the tax system to resolve the low earners tax relief issue were among other suggestions made by Prospect.

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