The Gender Pension Gap: new report shows it’s likely twice as bad as the Gender Pay Gap
You know that feeling that something is missing? That’s how I’ve felt about the narratives from the wider media concerning the Gender Pay Gap. For months the focus has been on the difference between the income for men and women at the same level fulfilling the same role, but little if anything, has been mentioned more widely outside of the industry around the critical impact this is having on pensions, and the chasm between male and female pension income – the Gender Pension Gap.
A recent report published by the union Prospect, and brought to light by Accountancy Daily reporter Pat Sweet, has found that the ‘gender pension gap is 39.5%’ – ‘twice the level of the gender pay gap’, with ‘women on average receiving £7,000 less than their male counterparts’ (1).
The figures for 2016/17 were deduced from analysis of the Department for Work and Pensions (DWP) Family Resources Survey responses, whilst the official calculations for the gender pay gap suggest this was at 18.4% in 2017 (1).
Sweet highlights that ‘the gender pension gap is defined as the percentage difference in average gross pension income for women receiving the state pension compared to the average gross pension income for men in receipt of state pension’ (1).
‘In analysing the causes of this gap, Prospect’s report found that occupational pension income is linked to salary, so the gender pay gap feeds through to lower pension income, meaning women continue to be penalised even after they have retired’ (1). And due to women taking a ‘disproportionate share of the burden of caring for children and other family members, this only exacerbates the gap in their occupational pension scheme service’ (1).
But these aren’t the only reasons. The union also identified that women currently ‘receive less state pension than men on average anyway – a gap that is not projected to be eliminated until 2041’ (2). And equally concerning is the fact that ‘the UK’s pension framework currently indirectly discriminates against women in a number of ways, such as women being disproportionately excluded from the provisions of automatic enrolment’ (2).
These new findings and conclusions only continue to highlight the significant oversight in the Gender Pay Gap narratives to date. It’s imperative that the Government begins to recognise the issue, open up a dialogue with employers and agents and acts swiftly to address it. Simply enforcing Gender Pay Gap reporting is not going to fix this issue – and certainly not in our lifetimes.
Prospect is now calling for the government to ‘introduce a statutory requirement for DWP to report annually on the gender pension gap, in order to focus attention on the problem and help build a consensus for action to tackle it’ (1).
They also want to see ‘positive recognition of caring responsibilities in the state pension system, credits for people who opt out of receiving child benefit, and tax relief for low earners in net pay pension schemes’ (1).
Sue Fern, Senior Deputy General Secretary at Prospect, commented that ‘the government must take [actions] such as abolishing the automatic enrolment earnings trigger which disproportionately excludes women from occupational pension scheme membership’ (1).