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Our Women and Retirement Report shows the gender pension gap narrowing
Our 20th Women and Retirement Report (PDF, 4MB) launched in November. One of the standout findings for me was that around two million women say they don’t believe they’ll ever be able to retire.
There is good news though, as the gap is narrowing for both gender pay and gender pension – but we need to do more. Currently, it looks like we won’t have pension parity for at least another 20 years. As the mother of a 15-year-old daughter this simply feels unacceptable.
We need national collaboration if we are to be the generation that closes the gender pension gap.
The biggest game changer
Policy change is perhaps the biggest game changer. Extending auto-enrolment, which has already brought millions into workplace pensions over the past decade, would go a long way to helping close the gap.
Firstly, by implementing the recommendations from the 2017 automatic enrolment review by removing the lower earnings limit and reducing the minimum age required to 18, rather than 22. This change could increase the future pension pot of an average 18-year-old woman by £47,000 in today’s money. This could be a real differentiator to help my daughter’s generation thrive in retirement!
Of course, it has to be said that doing this could result in higher costs for employers who are facing various rising overheads. For example, we’re already seeing some employers look at salary sacrifice as an attractive option to help mitigate forthcoming NI contribution changes. There are still life-changing measures that employers can take which would generate financial security for millions of women.
Empowering employees thorough collaboration
If we want to be the generation that finally puts the gender pension gap in the history books we need to collaborate, to role model what good looks like. Employers encouraging senior men to take parental leave and work flexibly will help balance work and family responsibilities, as childcare is typically led by women with 75% of part-time workers being female.
Enabling employees to take personal responsibility by providing financial education in the workplace so that they understand the importance of planning for their future and the impact of career breaks and part-time working is crucial, too.
So, as an employer what simple things you can do to help close the gap?
- Get employees talking about their pension and their wider finances – the ‘F’ word – with family, and friends so that they can plan for their future.
- Encourage them to make the most of their workplace pension so that they can benefit from matching employer contributions and tax relief. Encourage all employees to consider pension saving, even if they’re not yet eligible for auto-enrolment under current rules.
- Get them to download their pension app so that they get to know their pension and can look after their future. Almost everyone runs their lives with help from apps today – and it’s even more important for pensions as it is for health, holidays and streaming services.
These changes will go a long way to help us be the generation that puts the gender pension gap in the past.
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