Figures out this week showed that in the UK men have 38% more in their pension pot than women, with a 57% gap in favour of men found in Northern Ireland. But it’s not the first time research has highlighted such a huge disparity in gender pensions savings.
Meawhile, other pensions news reported by Employee Benefits revealed 25% of employees would increase pension contributions if they understood tax relief.
The survey by Opinium on behalf of insurer Royal London also highlighted a gap in pensions knowledge between the sexes, with 33% of women having no knowledge of tax relief compared to one-fifth (20%) of men. A further third (33%) of women had some understanding of how it worked, compared to 59% of men who said the same.
Therefore, you’d be forgiven for assuming that the difference in pensions knowledge could translate to a difference in the size of pension pots between genders too.
But while there could be many others reasons for the gap, such as women being more likely to take time off to look after children or not contributing to their pensions while on maternity leave, the question is, could employers be doing more to address this ongoing inequality? The simple answer is yes.
Employee Benefits’ own research at the end of 2020 found that only one in 10 employers even measured their gender pensions gap. Surely taking the time to find out if it’s a problem at their organisation is the least they can do, particularly when they have a significant role to play in the financial wellbeing of their workforce.
Responsible employers should focus on promoting access to pension arrangements among their female workforce and encouraging women to keep contributing to their pension, even when they are reducing their working hours or taking career breaks.
The Organisation for Economic Co-operation and Development (OECD) has also suggested changes to the design of pension arrangements to address the disruption to career patterns experienced by women when they have children. The OECD called for employers to better communicate payout options with survivor benefits and encourage the availability of solutions that increase payments over time.
The gender pay and pensions gaps have existed for far too long and the pandemic has exacerbated the problem. Now is the time for employers to take heed and take action.