The gender pension gap in the UK means that retired women effectively stop receiving a pension today – the equivalent of losing out on £7,600 a year on average.
The TUC warned that the income gap between men and women in retirement is now 36.5%, according to research from the Prospect union. That is nearly three times the size of the gender pay gap (13.1%).
The union body said that the three main drivers of the gender pension gap are unpaid caring responsibilities, the gender pay gap, and historical differences in the state pension.
Women are five times more likely than men to be out of paid work to look after children, elderly or disabled family members – missing out on workplace pension contributions as a result. Black and ethnic minorities and disabled women are among the worst affected, at seven and nine times respectively more likely than white and non-disabled men to be out of work due to caring responsibilities.
The gender pay gap means that, across their working lives, women persistently accrue lower pension contributions, particularly because women are three times more likely than men to earn below the £10,000 threshold for employers to have to put workers into a workplace pension.
TUC general secretary Paul Nowak said: “Everyone deserves dignity and security in retirement. But right now, too many retired women have been left without enough to get by. We must make sure that these inequalities are addressed for future generations.
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“That’s why reviving the Pensions Commission – bringing together unions, employers and independent experts – is a vital step forward. We now have a chance to make sure everyone, including women, receives the decent retirement income that all workers need.”
The TUC highlighted three solutions to narrow the gender pension gap in future:
- Addressing the gender pay and employment gaps. This should include improving childcare and social care, continuing to strengthen rights to work flexibly, as well as reforming the parental leave system to enable more equitable sharing of caring responsibilities.
- Reforming the occupational pension system so that people on low pay don’t miss out on employers’ pensions contributions, including phasing out the £10,000 auto-enrolment earnings threshold.
- Ensuring the pension system better recognises the value of unpaid caring, including introducing a Carer’s Credit in addition to existing national insurance credits for carers to replace lost workplace pension contributions. This would mean carers qualify for extra state pension to replace some of the workplace pension they miss out on building up.
Last month, the government revived the Pensions Commission, which will look into the causes of the pensions gap, among other issues.
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