The fact that both personal and workplace private pensions are closely aligned to paid work means that employers play an important role in determining post-retirement financial wellbeing. So what can employers do to close the gender pensions gap?
Women are more likely to work fewer paid pensionable hours than men over the course of their careers, as they more often work part-time or take career breaks, typically to assume caring responsibilities. Employers can address this by raising awareness of how working pattern choices will affect pensions, and provide employees both with information to make informed decisions, and with options for redressing any pension shortfalls. This may include giving people the choice of working longer hours later in their careers, retiring later or paying more into their pensions to make up for contribution gaps.
For women and men earning less than the statutory pensions automatic enrolment threshold of £10,000 per year, employers are statutorily obliged to let them know their options for joining the occupational pension scheme. Employers could consider going further and beyond their statutory obligations by automatically enrolling them into the company pension scheme, though this would increase the employers’ pensions costs. Employers can, however, simplify the administration of automatic enrolment by applying it to all employees. This would be contractual, rather than statutory, automatic enrolment.
Employers can remind and help employees to review their national insurance records to check their entitlement to a state pension. Individuals broadly need a total of 35 years of national insurance contributions to be entitled to a full state pension. If they have fallen short of this threshold, they will usually have the option to apply for national insurance credits or make voluntary national insurance contributions to fill any gaps in those contributions.
Thinking outside the pensions box, giving female staff every opportunity for career progression could also help close the gender pensions gap. This can involve changing the structure of parental leave benefits to allow caring responsibilities to be shared equally, offering flexible working and childcare vouchers and providing a family friendly culture in the workplace.
Jeremy Fisher is pensions partner at law firm Fieldfisher Manchester