Women are on average £106,000 worse off in retirement than men, partly because such a high proportion work part-time, according to research.
By their 60s, women typically have £51,100 in their pension – just one third of an average man’s £156,500 pot, the Pensions Policy Institute has calculated.
Read more: Without action, a crisis over pensions looms
Despite the fact 71.4 per cent of those surveyed were in work, 41 per cent of those were working part-time in the last quarter of 2018. This is compared to just 13 per cent of men.
A part-time salary may mean some do not meet the £10,000 a year threshold in a single job for to be auto enrolled into a pension scheme – causing them to miss out on saving for their retirement and receiving employer contributions.
The most common reason for women working part-time is to allow them to balance work with looking after their children (34 per cent).
Fawcett Society chief executive Sam Smethers said: “Women face a double jeopardy. They both carry more risk throughout their lives and are less able to take action to protect themselves.
She added: “The shocking pensions gap that women experience is a result of a lifetime of income and workplace inequality. If we introduced a carer’s top up for pension contributions and lowered the threshold so that more low paid women in part-time work could benefit, that could make a real difference.”
What can be done?
Now Pensions, which commissioned the research, has suggested five measures to close the gender pensions gap:
Five point pensions plan
Removal of the £10,000 auto-enrolment trigger — to get more women into auto-enrolment.
Auto-enrolment contributions on every pound of earnings — to improve pensions for part-time workers, who are more likely to be women.
A family carer’s pension top-up — to help women who take time out to care.
Always consider pension funds in divorce settlements — the median pension wealth of divorced men and women by retirement is £103,500 and £26,100 respectively.
Greater action on the availability of childcare — to enable those that want to return to work
Interim chair of trustees of Now Pensions Joanne Segars said: “Pension saving can be difficult, especially for women. Not only are women typically paid less, but they are much more likely to work part-time or take time out of the workforce to care for children or elderly relatives.
“This time out of the workforce has a huge impact and the part-time pensions penalty can’t afford to be ignored.
“Policy and regulation around saving for retirement need to change to better reflect the changes in the workplace and society. Small changes to auto enrolment could make a big difference for women but to really bridge the gap more needs to be done to help mums remain in the workforce.”