The Gender Pension Gap

The gender pension gap is the percentage difference in pension income for female pensioners compared to male pensioners.

Latest research shows that it increased to 40.3% last year. This was more than twice the level of the gender pay gap that year (17.3%).

The gender pension gap is particularly detrimental because it starts to affect women when there is little they can do about it.

A huge barrier to tackling the gender pension gap is the government’s lack of attention to it. There is no government estimate of the gender pension gap or policies to address it.

Reports shows that the main causes of the gender pension gap are:

  • An imbalance in the level of occupational and private pension saving between men and women. This has occurred and continues to be the case for many reasons including:
    * The impact of women taking breaks from paid employment or reducing hours worked to look after family
    * The cumulative impact over time of women earning less on average than men (the gender pay gap).
  • The indirect gender discrimination that is built into the pension system itself, including the disproportionate exclusion of women from being automatically enrolled into a pension scheme.
  • Inequality in the average level of state pension awarded to men and women. This is not projected to be fully addressed until about 2041 (but only for people reaching State Pension Age from that year)

To tackle the gender pension gap:

  • A statutory requirement for the government to report to Parliament on the gender pension gap and its plans for tackling it
  • Reform of automatic enrollment from the earliest possible date
  • An inquiry by the Work and Pensions Committee on the gender pension gap
  • An additional state pension credit for those who are not working because they are looking after children under 12
  • Measures that make affordable childcare more widely available so that people who want to return to work can do so
  • An independent Commission to consider the appropriate level of contributions under automatic enrolment
  • A concerted campaign to encourage higher take-up of credits that can boost women’s pension income
  • Changes to the tax system to resolve the ‘net pay anomaly’ whereby low earners do not benefit from tax relief on their contributions.