Report highlights long-term earnings penalty for single mums

New data shows single mums earn 53% less than the average man with a knock-on impact on their pensions.

Illustration showing mother walking with toddler alone

 

Single parents have the lowest average income for both men and women, according to new research. for Single Parents’ Day,

Data from NOW: Pensions reveals single fathers earn 32% less than the ‘average’ man, while women fare even worse, with single mothers earning 53% less than the ‘average’ man and 37% less than the ‘average’ woman. The data also reveals single mothers have the lowest rate of labour market participation of all groups, significantly impacting their ability to save enough into their pensions for retirement.

In the UK, women retire on average with just £69,000 in their pension pot – two-thirds less than men, who retire with an average of £205,000 saved.

A recent report by NOW: Pensions and the Pensions Policy Institute (PPI) reveals the one of the biggest causes is the differences in working patterns between men and women over the course of their lives. On average, women spend 10 years away from the workforce to raise families or take on other caring responsibilities. This career gap amounts to an average of £39,000 in lost pension savings, according to the report.

NOW: Pensions says a third of all working single mothers being ineligible for a workplace pension under current auto-enrolment rules. This is despite over half (59%) being in employment. NOW: Pensions calculates that working single mothers have missed out on over £852m in pension savings since the introduction of auto enrolment in 2012.  This is in large part because they are more likely to work part time. Over half [54%] of single mums work part time compared to the UK average of 21%. Auto-enrolment is only triggered once a person earns £10,000 in a single role.

Lizzy Holliday, Director of Policy and Public Affairs, NOW: Pensions, says:Since it was introduced, auto-enrolment has transformed how millions of people in the UK save for their pension. Yet for far too many in our society, saving an adequate amount in a pension remains out of reach.

“Data shows the current system has a disproportionate impact on working single mothers – and they are missing out on the critical support and contributions that other workers benefit from. In addition, our gender pensions gap research found that on average women will have a 10-year career gap to undertake caring responsibilities. This gap can also have a detrimental impact on future career and pay progression. Affordable and available childcare is a key enabler to support more mothers and families in their choices about their careers and working lives.

“The scale of the gender pensions gap remains vast and will require bold policy actions. Setting out a roadmap for the future of automatic enrolment, including tackling difficult issues of adequacy in retirement – which affects women disproportionately – should be front and centre of next steps.”

Meanwhile, new research from the Work Foundation finds a record 1.1 million UK workers (aged 16-64) are now on zero-hour contracts as their main employment, with women being 1.2 times more likely to be on a zero-hours contract than men and Black workers 2.7 times more likely than white workers.

Only 6% of zero hours workers have access to rights and a predictable income, says the report. One in 10 young workers in the UK were on zero-hours contracts in 2023. The report calls for a ban on the contracts as part of regular employment practice and instead for employees to be able to request zero-hours contracts if they need them.



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