UK women face pension ‘gap’ of £7,000, report says
Women in the UK receive 39.5% less in pension income than men – twice as large as the difference in pay between the sexes, a new analysis shows.
The trade union Prospect analysed responses to the Department for Work and Pensions’ (DWP) Family Resources Survey, and found that the pensions gap in 2016-17 was 39.5% – equating to an approximate average shortfall for women of £7,000 (€7,941) a year.
This was twice the level of the gender pay gap in 2017, it said, which was 18.4%. UK firms began reporting the difference between average pay for men and women earlier this year.
Sue Ferns, Prospect’s senior deputy general secretary, said: “Gender-based economic inequality may start in the workplace, but it follows women for the rest of their lives.
“It is not acceptable that women are condemned to less comfortable retirements and greater anxiety about finances because of inherent unfairness in the labour market and structural problems in the pension system.”
Prospect defined the gender pension gap as the percentage difference in average gross pension income for women receiving the state pension compared to that of men.
Ferns said the figures revealed “the shocking scale of the gender pension gap”, and clearly showed the need for the government to both recognise the issue and act urgently to address it. She called for the publication of an annual report about the size of the gap to help build a consensus for action to tackle it.
“There are also practical steps that government must take such as abolishing the automatic enrolment earnings trigger which disproportionately excludes women from occupational pension scheme membership,” she said.
Other action recommended by Prospect includes recognition of caring responsibilities in the state pension system, and the establishment of a new pension commission.
It also backed issuing credits for people who opt out of receiving child benefit and tax relief for low earners in net pay pension schemes.
In the European Commission’s Pension Adequacy Report 2018 published in May, women in the EU were shown to be facing 37% less in pension income than men due to pay gaps and shorter careers.
This report put the difference in average pensions between men and women in the UK at 35%, with the country having the fourth widest gender pensions gap in the union after Cyprus, the Netherlands and Germany.
At the other end of the scale, Estonia had the narrowest gap and Denmark had the second slimmest.
Yesterday, the Finnish Centre for Pensions reported that women in Finland have a pension income on average 25% less than men.