Half of women aged 45 and over fear they will have to continue working beyond state retirement age to make ends meet, according to survey findings that highlight the impact motherhood has on the gender pension gap.
Working Wise, which offers employment advice for older workers looking for flexibility and an improved work-life balance, found that 53% of women felt their pension pot was not sufficient enought to enable them to be financially independent.
The survey was sponsored by the Financial Services Compensation Scheme, which wanted to find out more about the impact career breaks have on women’s pensions.
Of the 1,356 workers aged 45 and over polled, 83% worked part time for at least one year of their career and 27% of these worked part time for over a decade.
Seventy-one per cent of the women said going part time or taking a career break had been the reason for reducing their pension payments. Sixty-for per cent said they had stopped pension payments alltogether due to a career break or a reduction in their working hours.
Sixty-three per cent said caring responsibilities had affected their career progression, while 28% said the menopause had had an impact.
Gender pensions gap
One-third had to reduce their hours at work because of a health issue.
Working Wise founder Gillian Nissim said women’s pension pots “come crashing down” from the moment women have caring responsibilities. This has contributed to a gender pension gap of 37.9%, she claimed.
“Women are more likely to have ongoing caring responsibilities that mean they will reduce their hours, work-part time or require flexible working and it is these necessities that are causing women to reduce or even stop their pension payments, these career decisions are then coming back to haunt women’s pensions in later life,” said Nissim.
Asked what would help them keep working and contributing towards their pensions, 23% of women said they would need more flexibility in their roles.
Some women needed a new job, but 31% who had tried to find new employment in the past five years had found this difficult. Forty-nine per cent of job seekers attributed this to “ageism”.
Working Wise suggested that more needed to be done to help women understand their pension savings, as 58% of those surveyed said they did not understand their pensions.
Only 19% of employers offered pension and financial awareness sessions for their staff and only 12% of women said their employer had published an action plan to address gender pay and pension gaps.
Nissim said: “We need need to start to make changes in the workplace that will make a dent on the 37.9% deficit that looms over women as they approach retirement. That over 50% of women will need to keep working beyond requirement is a huge wake-up call to the true impact that this pensions gap is having on women’s lives.”