Call for action on gender pension gap

Pensions

 

The gender pension gap is nearly 40% – almost twice the level of the gender pay gap, according to new analysis by the union Prospect.

Its analysis is based on  responses to the Department for Work and Pensions’ Family Resources Survey for 2016-17. Prospect calculates that the approximate average pension difference for men and women is £7,000 a year.

Prospect senior deputy general secretary Sue Ferns said: “These figures reveal the shocking scale of the gender pension gap and clearly demonstrate the need for the government to both recognise the issue and act urgently to address it.

“Gender-based economic inequality may start in the workplace, but it follows women for the rest of their lives.

“It is not acceptable that women are condemned to less comfortable retirements and greater anxiety about finances because of inherent unfairness in the labour market and structural problems in the pension system.”

The estimate of the gender pension gap will be published in a report by Prospect about tackling the gender pension gap.

The gender pension gap is defined as the percentage difference in average gross pension income for women receiving the state pension compared to the average gross pension income for men in receipt of state pension.

In analysing the causes of this gap, the report finds that occupational pension income is linked to salary so the gender pay gap feeds through to lower pension income, meaning women continue to be penalised even after they have retired. However, it says that the gender pension gap is even bigger than the gender pay gap because women bear a disproportionate share of the burden of caring for children and other relatives and this leads to extensive gaps in their occupational pension scheme service.

Ferns said: “First and foremost there should be a duty on government to produce an annual report on the size of the gender pension gap. This will focus attention on the problem and help build a consensus for action to tackle it.

“There are also practical steps that government must take such as abolishing the automatic enrolment earnings trigger which disproportionately excludes women from occupational pension scheme membership.”

The report also recommends that the Government looks at ways to positively recognise caring responsibilities in the state pension system and considers creating a new pension commission and giving credits to people who opt out of receiving child benefit as well as tax relief for low earners in net pay pension schemes.





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