Can the gender pension gap be closed?
By Teamspirit on Wednesday, 23 November 2016
This year’s Women and Retirement Report from Scottish Widows, launched last week, reveals that although record numbers of women are saving adequately for retirement there is still a significant gender imbalance. In fact, the disparity has actually increased within the last two years by 3%.
Beyond women’s longer life expectancy and maternity career breaks, employment trends are a likely cause – the report highlights that the rate of increase in self-employed women is twice that of men in the last four years. Given that the income of self-employed women is around half that of their male peers, it makes sense that there is an 11% gender gap in the ability to save enough for retirement among those that work for themselves.
As well as this 16% of women work part-time and twice as many women as men have two jobs or more – meaning that many do not qualify to receive contributions from their employer, as they are excluded from Automatic Enrolment by earning under the £10,000 threshold in those separate roles.
So what can be done to close the retirement saving rate gap? The report calls on the Government to reduce the earning limit for Automatic Enrolment eligibility as a possible solution. Yet in the long run employers, providers and public bodies need to produce more impactful pension guidance if both women and men are to live comfortably in later life - to encourage saving, change attitudes and improve awareness.