Before the Covid-19 pandemic, women already faced a pension deficit that meant they retired on roughly a fifth of the amount a man had accrued.
Data collected by the Chartered Insurance Institute’s Insuring Women’s Futures initiative before Covid-19 showed career breaks and part-time work reduce women’s prospects of getting a promotion, their hourly pay and ultimately, their lifetime earnings, depleting how much is saved into a pension to pay for their own later-life care.
As a result of Covid-19, many women had to reduce hours or even quit their jobs in order to care for shielding parents or home school their children as the government’s advice to stay at home, protect the NHS and save lives, resulted in schools shutting their doors to most children and childcare disappearing in the blink of an eye.
It is hardly surprising that the gender pension gap has, therefore, widened even further.
But employers can act to ensure the unpaid caring nature of their female employees does not deplete how much they have saved into a pension to pay for their own later-life care.
To end the gender pension gap, employers must start by monitoring and tackling the gender pay gap. Employers also need to review the proportion of pension contributions made by females compared with males.
HR departments can also be tasked with checking the proportion of females making a fixed contribution rather than a percentage and encouraging discussions about whether this sum is a suitable amount.
Often fixed sums get forgotten about by employees and do not increase each year with salary increases. This information should be used to inform and educate employees in a way that is engaging and inspires them to act to improve their financial resilience.
When women take time out of the workplace for caring duties, information about the impact this could have on their later life savings should be discussed and ways to continue to make pension contributions explored.
Ultimately, where possible, employers should support those with care responsibilities with flexible-working arrangements and employ the services of a financial adviser that staff can access and consult for guidance on the options available so that the gender pension gap can be eradicated.
Keith Richards is chief membership officer at the Chartered Insurance Institute (CII).
