Nest calls for ‘small steps’ to help close £70k gender pensions gap

The UK’s largest pension scheme, Nest, has called for “small steps” from savers and employers to help close the gender pensions gap.

According to Nest analysis, the average women working full-time in the UK could have £41,000 less pension savings than their male counterparts at retirement.

However, if the modelling is based on the overall average UK wage, including part-time work, the gap widens to up to £72,500.

To help address the issue, Nest noted that savers contributing an extra £2.50 a week into their pensions could increase their pot by £13,600 at retirement, while starting to save at 18-years-old could add up to £12,500.

Furthermore, savers were encouraged to find out whether their employer will match pension contributions and, if they do, pay in as much as they can afford.

Employers were urged to clearly advertise workers’ maternity leave rights, such as that many employees are entitled to full employer pension contributions based on their usual salary, rather than statutory pay.

“Women face systemic challenges in saving as much as men do for their retirement – these begin at the start of their working life and have a ripple effect throughout their life as they juggle conflicting priorities, lasting well into retirement,” commented Nest director of strategy and corporate affairs, Zoe Alexander.

“It looks like the ongoing impact of Covid-19 could also disproportionately affect women and may further undermine their pension savings potential.

“We want to make sure women have the right information about what they’re entitled to from their employers and their pension scheme, and we want to help our employers support their staff.

“Working together we can help fill in the pensions gender gap – and ensure building back better includes building a better pension pot.”

The People’s Pension director of policy, Phil Brown, said the provider “welcomed” the study and called for changes to auto-enrolment policy to help bridge the gap.

He stated: “A future change to both the age and earnings thresholds for automatic enrolment would allow more women to save more for a workplace pension.

“It remains to be seen what impact coronavirus will have on the jobs market but it’s hoped that the current trend towards flexible and home working will enable more women to return to the workplace for longer and be able to save more towards a pension.”

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