Govt urged to tackle gender pensions gap 'urgently' amid 'huge' disparities

The government has been urged to take "urgent" action to tackle the gender pensions gap, after analysis revealed "huge differences" in the average amount of pension savings built up by men and women in different industries and regions.

Analysis from the Trades Union Congress (TUC) revealed that, in 10 out of 15 industries for which reliable figures were held, median pension wealth for women is less than half that of men's.

This was true even in those sectors dominated by women, such as education and human health and social work, where women held just 36 per cent and 31 per cent of the pension wealth of male colleagues, respectively.

In manufacturing, wholesale, retail, and other service industries, women aged 45-64 had less than a fifth (19 per cent) of the pension wealth of male colleagues.

However, those in women in this age group in administration and support services the average women have built up almost no pension wealth at all, equal to just 1 per cent of the pension wealth wealth of male colleagues.

Regional disparities were also highlighted, revealing that women in London aged 45-64 had the largest gender pensions gap at 75 per cent, with an average pension wealth of just £12,600.

The research was published on 'gender pensions gap day', marking the 139 days, or four and a half months, that women would have to wait to get their pension in light of the 38 per cent income gap between men and women in retirement.

TUC also emphasised that since Prospect Union started calculating the gender pensions gap in 2015/16, it has reduced by just 2,8 percentage points, stressing that if progress continues at this rate, it could take another 54 years to close completely.

In light of this, the union has called on the government to take “urgent action”, calling for a statutory requirement for ministers to report on the gender pension gap, and to invest in childcare, as caring responsibilities are one of the key drivers of both the gender pay gap and gender pensions gap.

TUC also backed changes to auto-enrolment, including scrapping the lower earnings limit and removing the £10,000 earnings threshold, as well as setting out a timetable to increase statutory minimum employer contributions from 3 per cent.

TUC general secretary, Frances O’Grady, commented: “Women face a whopping pension gap. And at current rates of progress, it could take more than fifty years to close.

“Too many women are paying the price in retirement for taking time out of work or cutting back their hours when their children were small.

“Ministers must act now, or we will consign more generations of women to poverty in retirement.

“We need to fix our pension system so that all women can benefit from a workplace pension with decent contributions from their employer, regardless of how much they earn.

“And we must invest in childcare. Caring responsibilities are one of the key drivers of the pensions gap – and the gender pay gap. Making childcare cheaper is a vital part of our economic recovery and essential for enabling mums stay in work.”

Adding to this, Prospect senior deputy general secretary and TUC president, Sue Ferns, said: “It’s shocking that we’re almost halfway through the year before we’ve reached the equal pensions point – how can it be right that women pensioners earn almost 40 per cent less than men?

“It is time for the government to acknowledge the huge problem of the gender pension gap and start doing something about it. If we continue to close the gap at the current rate, it will be generations before women earn the same as men in retirement.

“The first thing the government needs to do is acknowledge the problem and ask ONS to start benchmarking the gender pension gap so we can properly measure progress year-on-year.

“Changing the auto-enrolment rules could be done quite quickly and would be one way for the government to demonstrate support for working women.”

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