While the Gender Pay Gap receives a lot of attention, another financial disparity based on sex could have a greater impact on women’s lives: the Gender Pension Gap.
Recent data analysed by Moneyzine.com shows that women face significantly larger financial disadvantages in retirement than they faced in the workforce.
The growing gender pension gap
The Gender Pension Gap in the UK – the difference between retirement income for men and women – has increased over the last few years. Based on the most recent data, the Gender Pension Gap is currently at 40.5 percent, the highest level since 2015. In contrast, the overall Gender Pay Gap decreased by 2.8 percent during the same period.
Contributing factors
The Gender Pension Gap is not only a reflection of the Gender Pay Gap. Factors such as differences in State Pension entitlements and more unpaid hours doing ‘care work’ contribute to the gross inequality in retirement income.
Impact of inequality on women’s pensions
The Gender Pension Gap has a material impact on women’s experience of retirement, as well as their financial independence and freedom. Women aged 65 have 66.5 percent less pension savings than men of the same age, meaning they would have to spend an additional 18 years in full-time employment to gain parity with their male counterparts.
Private pension wealth
Women’s private pension wealth is less than half that of men in two-thirds of industries, resulting in an overall private pension gender wealth gap of 56 percent.
Less pension income for women
At its current level, the Gender Pension Gap represents £7,100 less pension income for women. This underscores the urgent need to address the Gender Pension Gap and ensure that women have access to equal financial opportunities in retirement.
Jonathan Merry, CEO of Moneyzine.com commented:
“At its current level, the Gender Pension Gap represents £7,100 less pension income for women. This has a material impact on women’s experience of retirement, as well as their financial independence and freedom.”
Amelia Brand is the Editor for HRreview, and host of the HR in Review podcast series. With a Master’s degree in Legal and Political Theory, her particular interests within HR include employment law, DE&I, and wellbeing within the workplace. Prior to working with HRreview, Amelia was Sub-Editor of a magazine, and Editor of the Environmental Justice Project at University College London, writing and overseeing articles into UCL’s weekly newsletter. Her previous academic work has focused on philosophy, politics and law, with a special focus on how artificial intelligence will feature in the future.