Is the pension gender gap getting worse?
Pensions expert Jackie shares her views on closing the pensions gender gap, and whether we're heading towards a pensions crisis for women.
You’re a vocal campaigner around the pensions gender gap – why this is such an issue?
“Well, first off the good news is more women than ever are putting money aside for their retirement. But because of the gender pay gap, the fact women are more likely to work part-time, in lower paid industries, and take more time out for having a family, young women would need to save an average of £185,000 more during their working life to enjoy the same retirement income as men.1
Another way to look at this is that on average women aged between 65 and 74 years old today will have saved half as much money for retirement as men the same age.2 This is why Scottish Widows continues to campaign about the pensions gender gap.
In fact, we are really passionate about addressing this issue and report on this every year in our Women and Retirement Report to update the trends. We have 17 years of research which is used to drive discussion and we work closely with industry bodies to shape the agenda and to lobby for change.3
For more information have a look at the report here.”
Should we be focusing on fixing the gender pay gap before we tackle the pensions one?
“Both of these things are inextricably linked and need to be addressed - but gender pay inequality is not the only issue driving the pensions gap.
To examine this further, we can see there is still a sizeable pay gap with median gender pay gap in 2021 at 12.1% in favour of men.4 What we can start to see are some broader systemic challenges in the way childcare and domestic responsibilities are divided, where women are more likely to have a much more fragmented career with time out of the workplace for maternity and caring responsibilities. After having a child, nearly two thirds of women who return to work do so on reduced hours.
We are beginning to see more ‘modern family’ set ups but the nuclear family is very much the status quo, where mum fulfils the caring role and dad is the primary breadwinner. Even where both parents are working full-time, a disproportionate amount of the child care responsibilities and funding the childcare often fall to the woman, not to mention housework!
There is still a long way to go to shift from these societal norms and we won’t change them over night, but progress is possible. For example, ensuring women have equal career opportunities from the moment they finish education, improving flexibility in work by providing better maternity and paternity support, and making child care more affordable, will all help to close the earnings gap.
When it comes to the pensions gap, relatively simple things such as removing the minimum earning threshold to qualify for automatic enrolment into your workplace pension would make a big difference. As would lowering the minimum age from 22 to 18.”
Young women will need to save an average of
during their working life to enjoy the same retirement income as men.