Has lockdown made the pensions gender gap worse?
Pensions expert Jackie shares her views on supporting 20,000 employers with their workplace pensions, and closing the pension gender gap.
You’re a vocal campaigner around the pensions gender gap – why this is such an issue?
“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, a woman will need to work an extra 37 years to allow her to have a pension pot the same size as her male counterpart.
Another way to look at this is that a man retiring at 65 today on average has £130k in his pension pot and woman of same age on average will have £30k! At Scottish Widows we are really passionate about addressing this issue and report on this every year in our Women and Retirement Report to update the trends, and also aids when we lobby Government for policy change. For more information on the issue have a look at the report here.”
Should we be focusing on fixing the gender pay gap before we tackle the pensions one?
“In short, no. Both things need to be addressed and gender pay is not the only issue driving the gender pensions gap. To examine this further, we can see there is still a sizeable pay gap with median income in 2019 at £30.4k for a man and £19.6k for a woman. 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’ sets 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.”
A woman would need to work
an extra 37 years
to allow her to have a pension pot the same size as a her male counterparts.
Gender at Lloyds Banking Group
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