Is the pension gender gap getting worse?

What can women do to close the pensions gap?

“One of the most important things women can do is to always keep in mind their own personal finances. 

Indeed, 21%⁵ of women recently told us they plan to rely at least in part on their partner’s income during retirement. The problem is, this could leave them particularly vulnerable should their relationship break down, especially since it’s rare for divorce settlements to account for pension assets. With this in mind, it’s important to keep pensions in the discussion when dividing assets.

It also pays to be mindful of career choices too. For example, a career break would not only reduce the amount being paid into an employer pension pot, but also lower National Insurance contributions. This, in turn, could affect eligibility for a state pension in the future.”

Did lockdown made the pensions gap worse?

“Yes, absolutely. Lockdown and the impact of the pandemic set women and Black, Asian and Ethnic Minority groups back, in some ways undoing years of progress made towards equality. Women were more likely to have worked in sectors hardest hit by coronavirus, for example care work, retail and hospitality, often putting them at greater risk of redundancy.

In many cases women had to bear the brunt of home-schooling and reduce their working hours or stop work altogether in order to look after and educate the kids whilst dad’s work takes priority. Breaks in employment not only mean a halt to pensions savings, it also means gaps in National Insurance contributions which can impact eligibility for the state pension.”

Are we heading towards a pensions crisis for women?

“If we don’t continue to lobby for change and raise awareness of the gender pensions gap, then yes we are heading for a crisis. We need to support women to become more confident when it comes to their all their finances, not just pensions.  

As I say, Lloyds Banking Group and Scottish Widows are very active in this space, and our annual Women and Retirement Report aims to shine a light on the continuing inequalities that women face when it comes to their pensions and security in retirement. 

We also call for more reforms from the UK Government too, such as reducing the earnings threshold for auto-enrolment pensions schemes and making childcare more affordable.”

What has Scottish Widows been doing to encourage women to keep saving for retirement during the pandemic?

"We’ve been encouraging everyone that can afford it to continue to pay at least 12% of their income into their pension pots. And we’ve created a dedicated hub to encourage women to feel more empowered to take control of their pensions. The hub covers many of the issues that impact women to provide guidance and support – you can learn more about this here.⁶”

The pandemic has shown that people can work remotely and flexibly – do you think that this new way of working will help close the gender gap that we see in senior roles in the finance industry?

“I think it will go some way to help as women will feel better equipped to juggle work and home commitments, and I have heard loads of stories where families are sharing the load much more evenly, which has been easier to do when nobody has a long commute. The fact we’ve proven that most roles can now be carried out remotely without extensive travel will make senior roles more appealing for many women. It’s not just about working flexibly though, we need to continue to support, nurture, and attract female talent.

Simple things like changing the way job adverts are worded can result in a much more diverse candidate list. Having inspiring role models at all levels and in all job types also removes the stereotypes and I hope inspires many women to put themselves forward for opportunities.”