WASPI ‘distressed’ by pension gap as woman gets £800 less than husband on ‘similar’ scheme
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WASPI said: “We are distressed to hear that younger women saving into pension schemes today are still unable to contribute as much as men because they still don’t earn as much. Gender pay gap will always result in a gender pensions gap”.
The striking new data, produced by Cebr and more2life, show that the gender pension gap has surged by £26,673 in the last year to £183,936 in total and has highlighted the impact of Covid on retirement savings for over-55s.
The jarring disparity is despite the fact that women contribute a higher proportion of their income to their pension pot, with 9.4 percent of income contributed compared to 8.3 percent for men.
This means that the average woman can expect a retirement income of only £14,964 whereas men enjoy £20,712 per year in income.
One WASPI woman, who wished to remain anonymous, opened up on how the gender pension gap relates to her experience.
She said: “Although I always managed to get employment, some employers didn’t have pension schemes, and early in my career pension schemes insisted on a minimum number of years – initially five and then two. So if you left the job within five years you had to take your subscriptions back.”
Comparing her working life to her husband, the two are remarkably similar in terms of years worked and yet her monthly pension income is little over half of her husband’s.
“I myself worked full time for 39 years for various employers”, she said, “my husband worked for 34 years full time for one employer and then six years part time for another.
“My husband’s pension is £1,700 per month and mine is £917 per month”.
The staggering imbalance is a result of her working for various employers, where she found it difficult to access a pension due to the peculiarities of pension schemes’ rules at the time.
The longest time she spent at any one employer was seventeen years at the Post Office between 1986 and 2004. Her husband, on the other hand worked for one employer continuously for 34 years.
“Both pension schemes are similar,” she added.
Dave Harris, Chief Executive Officer at more2life, said: “Although women appear to be better at saving into their pension, they still face a retirement that is less comfortable and financially secure than their male counterparts.
“The stark difference in retirement incomes highlights the need to address the root causes of financial gender inequality and better support women as they make choices around how to use their assets both in the lead up to and during retirement.”
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The worrying new data have added to a large body of research showing women’s savings lag behind their male counterparts.
Research by Scottish Widows has previously demonstrated that women would need to work to the age of 100 to match men’s pension pots.
The recent research by Cebr and more2life also showed that the pandemic has had a disproportionately high effect on women compared to men, although both groups have been hit.
The impact of the pandemic has been far-reaching, as not only did investment returns stall, hitting the value of pension pots but the pandemic severely limited the ability of over-55s to store away their money into pensions.
Thirty percent of women say their financial situation is worse now than at the beginning of the pandemic, with only 24 percent of men saying the same.
The research highlighted an issue, which has since been echoed by WASPI, over the nature of women’s work.
Women tend to work in sectors hardest hit by the pandemic, which has had the knock-on effect of throwing more of them on furlough.
This has been a crucial support mechanism for millions of Britons, but has also reduced incomes by 20 percent.
Research from King’s College London and The Global Institute for Women’s Leadership also showed 31 percent of furloughed women had worked zero hours in July 2020 since the initial lockdown in March, compared to 20 percent of their male peers.
This indicated that female workers were more likely to be furloughed for longer than men.
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