Women’s private pension income under half of men’s

Women’s annual private pension income is 55 per cent lower than that of men, despite record levels of women in employment (72 per cent), according to a new study.

Research from Now Pensions and the Pensions Policy Institute revealed that the average annual private pension income for men aged 65 and over is £8,620, compared to £3,920 for their female counterparts.

This partially reflects the fact that women working full-time still earn almost £6,000 less than men per year, with an average annual income of £24,150, compared with men’s £29,980.

Of the 13.4 million employed women in the UK, around 3 million (23 per cent) fall below the qualifying earnings threshold of £10,000 for automatic enrolment, while just 12 per cent of male workers are in the same boat.

Over one third of women (36 per cent) currently work part-time, as they are more likely than men to take a cut in hours while caring for children or elderly relatives.

The research added that new legislation to include income from second jobs as part of the eligibility for automatic enrolment an additional 80,000 people would be pushed over the threshold, including 60,000 women.

Now Pensions chair of trustee, Joanne Segars, said that “policy and regulation around saving for retirement need to better reflect the changes in the workplace and society”, adding that focus should now be on “making it fairer for everyone who is trying to save for their future and accommodate the millions of women who are locked out of the current pension system”.

She stated that the government should “act now to accommodate a fairer pension system for women with two or more part-time jobs” and said Now Pensions was “hugely supportive” of an amendment proposed by Baroness Jeannie Drake known as the ‘family carer top-up’.

Baroness Jeannie Drake said: “Millions of savers miss out on workplace pension contributions when they are caring for children or elderly relatives. This is why I lodged an amendment in the Lords to the Pension Schemes Bill just last week, seeking a review by the Secretary of State of how auto-enrolment provisions could address the pension penalty in retirement that relevant carers experience.

“A ‘carer top-up’ for those who are missing out on workplace contributions would make a real contribution towards their pensions. This would help approximately three million women, in addition to 300,000 men, to top up their pension savings whilst taking time out of work to be carers.”

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