Govt urged to expand employer pension duty as gender gap concerns

Nearly one third (32 per cent) of women are reducing their hours for an extended period of time during their working life, industry research has found, prompting calls for the government to expand on employers’ workplace pension legal requirements.

The research from Phoenix Insight and Institute for Employment Studies (IES) also found that 20 per cent of women have opted out of a workplace pension scheme, 36 per cent of whom did not consider the impact that would have at the time of their retirement or the loss of benefits at retirement.

In addition to this, it revealed that over half (55 per cent) of women would like to receive more information about their workplace pension from their employer.

In light of these findings, Phoenix Insights urged the government to make it a legal duty for employers to inform staff of the impact that any changes in their working hours, and resultant earnings, may have on their pension contributions.

The report also outlined a number of broader steps that could be taken to increase saving capacity and close the gender pension gap, such as increasing the scope of auto enrolment and boosting financial literacy.

In particular, the report suggested that the government look to increase the coverage and reach of impartial guidance by making free Pension Wise appointments accessible to anyone, and review the advice and guidance boundary to allow a larger population to have access to tailored financial support.

It also encouraged the government to revisit the Carer’s Leave Bill to ensure that working carers can access up to 10-days statutory paid leave, and ensure that flexible working is made available from the first day of employment.

Phoenix Group announced that it has also made changes to its own operations in light of the findings, including looking to proactively re-enrol employees not on the workplace pension scheme every year, instead of every three.

The group will also look to make pension impact information compulsory when reducing working hours, and monitor and analyse the monthly pension contributions of male and female colleagues across Phoenix Group.

Commenting on the findings, Phoenix Insights director, Catherine Foot, stated: “Women are being left behind in their pay and pension saving at key life stages and decisive action is needed to reform current policies and practices to support businesses and individuals in addressing saving inequality.

"Alongside employers, our research with IES highlights the need for the government to increase their efforts to close the gender pension gap.

“Efforts should be focused on improving pension policy, providing better support for employers and introducing legislative protections for women at life events.

"We have identified key recommendations for these areas, including better pension accessibility and information, boosting financial literacy, and improving access to care and flexible working.

“Coordinated cross-departmental action to reform policy at the points which make the biggest impact to women’s working lives will lead to meaningful progress on the gender pension gap.”

IES research fellow, Abbie Winton, added: “If the current and future governments fail to act on the gender pension gap, we can be certain that increasing numbers of women will receive an income at retirement which will fail to allow them to meet their basic needs.

“Legislative changes, particularly around the removal of auto-enrolment thresholds, widening access to advice, improving the affordability and accessibility of child and social care, and rights to flexible working, are all critical to allow individuals to take control over both their working lives and their ability to save in a way that works for them.”

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