The average retired woman will go four-and-a-half months per year without a pension, as today marks the TUC’s Gender Pension Gap Day.
The income gap between men and women in retirement is now 37.9% – equal to £7,000 per year – which is more than two-and-a-half times the gender pay gap (14.3%) for women in work.
As such, the pension income gap between men and women means that the average retired woman now effectively goes four-and-a-half months of the year (139 days) without getting a pension.
The analysis from the Trades Union Congress (TUC) has led it to brand today the Gender Pension Gap Day – the day female pensioners effectively stop getting paid a pension because of the gender pension income gap.
The trade union said the gender pay and pension gaps are closely linked, and they share common drivers, such as women having to work part-time, lack of access to flexible working, and low pay disproportionately impacting women.
However, while tackling the gender pay gap would go some way to addressing the gender pension gap, it would not close it completely.
The TUC said closing the care gap is key to closing the pension gap. The amount of time women spend out of paid work because of caring responsibilities is one of the biggest factors of the gender pension gap.
Indeed, its research revealed that nearly one-and-a-half million women who are not in paid work are undertaking unpaid caring responsibilities, with women nearly five times more likely than men to be out of work because of this. But, black and ethnic minority (BME) women are six-and-a-half times more likely than men to be out of work for this reason.
As such, introducing day one rights to parental leave and flexible working will also ensure that employers are “enabling families to share caring responsibilities”.
The TUC added that women in their 20s and 30s are most likely to be undertaking unpaid care.
Its research revealed around one in 11 women aged 25 to 29 – more than 190,000 women – are undertaking caring responsibilities while not in paid work – compared to fewer than one in 100 men of the same age.
Meanwhile, around one in 13 women aged 30 to 34 are caring while out of work, compared to fewer than one in 100 men of the same age.
“But at every age – from the very start right through to the end of their careers – women are more likely than men to be out of work because of caring commitments”, the TUC said.
Other drivers of the gender pension gap include auto-enrolment rules, which mean low-paid and part-time workers are not enrolled into a workplace pension, as well as historical differences in National Insurance that have left women with lower state pensions on average.
Care credit for women
Paul Nowak, TUC’s general secretary, said: “Far too many women are consigned to poverty in retirement. Everyone should have the chance to build up a pension, regardless of how much they earn.
“Ministers must set out a plan for closing the gender pensions gap – and fix our pensions system so that all women can benefit from a decent income in retirement.
“Women leaving paid work and taking on caring responsibilities is a key driver of the gender pensions gap – and the gender pay gap more generally.”
Nowak added: “Women kept out of work for caring responsibilities should build up extra state pension to recognise the value of that work.
“Many women in work don’t get any sort of workplace pension at all because they don’t earn enough – often because of working part-time around caring commitments.
“We also need to tackle the care gap and give greater support to those with caring responsibilities. Women are often the ones expected to plug the gaps when our social care and childcare systems are not sufficient.
“Commitments to introducing a fair pay agreement in social care and reforming the childcare and early years sector will also help to tackle drivers of the pensions gap.”
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