Pay disparity could keep pension gap open until 2100

Pay disparity could keep pension gap open until 2100

Pensions for women in the UK will remain far lower in value than men's unless pay parity and education are tackled head-on, the chief executive of the Chartered Insurance Institute has warned.

Sian Fisher, who in 2019 co-authored the Insuring Women's Futures Manifesto, said although it would take time for women to take more control over their financial futures, the conversations needed to happen now to help women avoid a financially insecure retirement.

Ms Fisher said: "Things will take time. After all, human beings have only been on this planet for a million years and that's only a nanosecond in the whole history of the earth. In that time, women have only existed as legal persons since the middle of the last century, so things do take time. 

"We have had equal pay legislation for nearly 50 years and, I would imagine, if we had done the report 50 years ago it would have been even worse."

But, she warned, the gender pay report has been showing a persistent gap between the earnings power of men and women with the same experience, doing the same job. "And it is not moving. The current estimates are that if the pay levels stay as they are, then it will be 2050 by the time there is a closing of that pay gap.

"And, if you extrapolate from that, pension parity might not be there until 2100, and none of us think that is the right place to be."

Quite aside from the moral issues of 'fairness', she pointed to the fact this would mean a higher cost to society in terms of a greater dependency on the state pension.

In fact, the state pension has already been a bone of contention among women especially since the rising of the state pension age. 

Steven Cameron, pensions director at Aegon, said the state pension should mirror the flexibility awarded to private pensions, citing in particular the "plight of the Waspi women" (those covered by the Women Against State Pension Inequality campaign), who have suffered "hardship caused by having to wait longer for the state pension to kick in".

If workplace pension values for women are still so far below those for men, the industry needs to do more to help those women approaching and already in retirement.

Ms Fisher said the work the CII and its members were doing to help turn this around was a vital step in the right direction, adding: "So if we can turn this from a liability to a positive, we can be proud of having lived through these changes and made a positive contribution."

Keith Richards, chief executive of the Personal Finance Society, agreed that education and conversations about finance were a great place to start for helping to bridge these gaps.