There is a gender pensions disparity in every industry in the UK, even those with a majority of female employees, according to Legal & General.
According to an analysis of more than 4.5 million investors by Legal & General, women’s pensions are typically half as large as men’s pensions – £12,000 against £26,000. This problem is made worse by the fact that women must have saved an additional five to seven per cent of their income at retirement age since they are projected to live four years longer than men.
The gender pensions gap persists across all industries, regardless of the average wage, and spans from a deficit of 59 per cent in the healthcare sector to a disparity of 13 per cent in courier services.
The highest gender pension discrepancies were found to be in the hospital sector (59 per cent) followed by construction (51 per cent) real estate/property development (48 per cent) pharmaceutical (46 per cent) aerospace, defence and government services (46 per cent) and senior care (45 per cent) industries. Three of these six sectors—healthcare, pharmaceuticals, and senior care—are critical employers of women3.
The gender pension gap is caused by a variety of factors, such as the fact that women are more likely to take career interruptions because of caring duties, as well as the fact that they occupy less senior positions and are paid less than males, which results in smaller pension contributions. Nearly 38 per cent of people who took a professional sabbatical were unaware of the financial consequences for their pension payments.
A notable gender confidence gap in managing pension funds is another factor that could be at play. Compared to nearly half (48 per cent) of men, more women (28 per cent) than men (48 per cent) stated they were confident in their abilities to make decisions regarding their pension. Women are less likely than males to feel competent handling their savings and investments (22 per cent of women versus 41 per cent of men), indicating that this lack of confidence extends to other financial decisions (56 per cent of women versus 67 per cent of men).
Legal & General commercial director of workplace savings Katharine Photiou says: “We looked at data from over four million workplace members and found that every industry in the UK has a significant gender pensions gap. This is a serious issue in itself, but it deepens when life expectancy is taken into consideration too.
“We’ve all heard about the gender pay gap, but very few discuss the gender pensions gap, despite the fact so many women experience it. This shows more needs to be done to boost engagement with pensions, particularly with those who feel less confident, and who may need help on where to start when it comes to making financial decisions.
“Millions of people would benefit from a wider range of support services to make more informed decisions about their savings and investments. But this support needs to be personalised to achieve any real shift, and this is where government and industry need to work together. Pensions can seem complicated but they’re just a regular savings plan with some tax perks. We need to demystify pensions and get back to basics.”
Legal & General co-head of defined contribution Rita Butler-Jones says: “It is striking that some of the sectors where we see the highest gender pensions gaps – such as senior care, healthcare and pharmaceuticals – are also among the top sectors for female employment. This demonstrates the extent of the crisis facing many women as they approach retirement, even in careers where they make up the majority of the workforce.
“There is, therefore, a real need for providers, schemes and government to work together to understand and tackle both the sector-specific and structural barriers which women face in saving for their future.”