On Single Parents’ Day, recent data from NOW: Pensions underscores a significant gender disparity in pension savings, indicating that single mothers earn a staggering 53 percent less than the ‘average’ man and 37 percent less than the ‘average’ woman.

The data, compiled by NOW: Pensions in collaboration with the Pensions Policy Institute (PPI), paints a concerning picture of the financial landscape for single parents.

Despite efforts to promote gender equality in the workforce, the earnings gap persists, with single mothers bearing the brunt of this disparity.

Shockingly, single mothers have been found to have the lowest rate of labour market participation among all groups, exacerbating their struggle to save adequately for retirement.

What about pension pots?

According to the research, women in the UK retire with an average pension pot of just £69,000, a stark contrast to the £205,000 saved by their male counterparts. This substantial gap in retirement savings is attributed to various factors, including differences in working patterns between men and women over their lifetimes. On average, women spend approximately 10 years away from the workforce to fulfil caregiving responsibilities, resulting in a significant loss of potential pension savings amounting to an average of £39,000.

Moreover, the data highlights a concerning trend regarding workplace pension eligibility. Despite over half (59%) of working single mothers being employed, a staggering one in three are ineligible for a workplace pension under current auto-enrolment rules. This exclusion from pension schemes has resulted in single mothers missing out on over £852 million in pension savings since the inception of auto-enrolment in 2012.

The challenges faced by single mothers are further compounded by their high prevalence in part-time employment, with 54 percent of single mothers working part-time compared to the UK average of 21 percent. This disproportionate representation in part-time roles often leaves single mothers unable to meet the eligibility criteria for pension enrolment, depriving them of vital employer contributions and tax relief.

Addressing the gender pensions gap

Commenting on the findings, Lizzy Holliday, Director of Policy and Public Affairs at NOW: Pensions, emphasised the need for urgent policy interventions to address the gender pensions gap. Holliday stressed the importance of affordable childcare as a critical enabler for women in navigating their careers and working lives, calling for concrete measures to address the systemic barriers faced by single mothers.

John Adams, Senior Policy Analyst at the Pensions Policy Institute, echoed these sentiments, highlighting the urgent need for comprehensive policy reforms to mitigate the financial challenges faced by single parents. Adams emphasised that while pension policy options could offer some relief, meaningful improvements in outcomes for single parents would require fundamental changes in labour market conditions and enhanced access to affordable childcare.

As the debate surrounding gender equality and financial security continues, the plight of single mothers serves as a stark reminder of the persistent inequities embedded within our society, underscoring the pressing need for concerted efforts to address these disparities and ensure a more equitable future for all.

 

 

 

 

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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.