The unacceptable gender pension gap identified in Scottish Widows Women and Retirement report
Commenting, Gregg McClymont, director of policy at The People’s Pension1, said:
“These findings are further evidence of a stark and worrying gender pensions gap. With the average female pensioner £7,000 a year worse off than a man the same age , it’s something we cannot and should not ignore.
“Tweaks to auto-enrolment policy will help reduce this gap but if we’re going to really tackle gender pensions inequality, we need to look at the motherhood penalty women face when they have children.
“To look after their children, women often reduce their working hours or stop working altogether for a period and their rates of pay and potential for progression can be unfairly affected, all of which mean their pension savings take a hit. While many women choose to change their working lives because they want to spend more time with their kids, our research2 is clear that the high cost of childcare is also a key factor.
“We’re calling on the next government to introduce a package of measures to address this inequality. It must recognise that caring is an economic activity which should attract workplace pensions contributions; lower the threshold at which auto-enrolment kicks in to the National Insurance trigger to bring in nearly half a million new pension savers – three-quarters of whom would be women; and future proof the guaranteed 30 hours per week childcare for all three and four year olds policy, by funding it via a specific ear-marked grant to local authorities.”
About The Peoples Pension
The Peoples Pension is a leading, not for profit auto-enrolment pension scheme, representing more than 4.7 million pension savers from 90,000 employers. The Peoples Pensions published a report The Gender Pensions Gap: Tackling the Motherhood Penalty.
The People’s Pension launches manifesto ahead of 2019 General Election
The People’s Pension1 has today called for a package of measures from the next Government to make saving pay for the low paid, reduce the gender pensions gap, and make pensions more transparent.
Although auto-enrolment has been a success so far, with 10 million more people now saving for retirement, the workplace pension provider’s new manifesto also underlines the need to ensure people are saving enough for a comfortable retirement and millions of workers aren’t unnecessarily excluded from auto-enrolment.
With just 30 days before the nation goes to the polls, it calls on the next Government to:
- End the ‘net-pay anomaly’ which deprives an estimated 1.75m low earners of much-needed tax relief through auto-enrolment.
- Extend auto-enrolment to millions more workers and help people save more by making pension contributions begin from the first pound of earnings; lowering the eligible age for auto-enrolment onpeoples pto 18; and reducing the earnings requirement to the primary National Insurance threshold of £8,632.
- Introduce a universal flat rate tax relief between 25-30 per cent to increase the pensions savings of those who need it most.
- Reduce the gender pensions gap by accepting the principle that caring is an economic activity which should attract workplace pensions contributions.
- Support a one stop shop, publicly operated pensions dashboard free from commercial sales pitches, featuring all pensions entitlements from day one, and with pension charges disclosed in a standard format.
People at risk of not having enough pension
Commenting, Gregg McClymont, director of policy at The People’s Pension, said:
“The topic of pensions may not be a vote winner like the NHS or Brexit, but with millions of people at risk of not having enough to live on in retirement, it’s an issue that all politicians should care about and act on.
“There can be no doubt of the positive impact that auto-enrolment has had, but the next Government must work to ensure that people are saving enough for a comfortable retirement and that millions of workers – in particular women – aren’t unnecessarily excluded from auto-enrolment.
“We’re calling on future ministers to stop women’s financial futures from being penalised because they choose to have children, and ask that the next Government ensures savers can access all their pensions information on a one stop shop dashboard that’s operated in their best interest and free from commercial sales pitches.
“Pensions matter; which is why we’re launching this manifesto and asking those who seek to represent us to prioritise improving the system.”