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The gender pension gap

Tackling the gender pension gap

"Gender inequality in pensions – a roadmap to nowhere?"
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The gender pay gap, the difference between men’s and women’s average earnings, is a well understood concept and policies for tackling this problem are relatively well developed.

The fact that there is also a gender pension gap, and that this is much larger than the gender pay gap, is much less well known.

The first step in addressing a problem like the gender pension gap is raising awareness of its existence.

There is no official estimate of the gender pension gap for the UK so Prospect carried out an original analysis of datasets of responses to the government’s Family Resources Survey in order to produce an authoritative indication of the size of the problem.

Using the latest dataset available, Prospect produced an estimate of 39.5% for the gender pension gap in 2016-17. To put this into context, it is over twice the latest estimate of the gender pay gap of 18.4% in 2017.

Prospect’s research shows the scale of the gender pension gap for people who have already retired and are currently drawing pensions.

Unfortunately, many of the drivers of today’s gender pension gap continue to apply so this issue is relevant to current employees too. The gender pension gap will persist for many more decades unless we do something about it.

Prospect’s research identified a number of causes of the gender pension gap, including:

  • Lower state pension entitlement. Currently women receive less state pension than men on average. This gap is not projected to be eliminated until 2041.
  • The gender pay gap itself. Occupational pension income is usually directly related to income while working, so the gender pay gap feeds directly through to the gender pension gap.
  • Caring responsibilities. Labour force data shows that many more women than men are economically inactive or working part-time due to taking on a disproportionate share of the responsibility for caring for others and this impacts on pension income.
  • Discrimination in pension system. The UK’s pension framework indirectly discriminates against women in a number of ways (eg women are disproportionately excluded from the provisions of automatic enrolment).

Tackling the gender pension gap is obviously a trade union issue and Prospect has identified a number of steps that reps and branches can consider taking, including:

  • establishing the extent of the problem within the branch’s workplaces and starting a dialogue within the branch and with the employer about how to resolve it
  • ensuring that pension scheme membership is maximised in all workplaces where Prospect is represented
  • providing information to Prospect members on the potential impact of caring responsibilities on pension income so they can be empowered to do something to address this.

Of course there is a role for government too and Prospect will be pushing for a number of policies to deal with the gender pension gap:

  • a statutory requirement for DWP to produce an annual report about the gender pension gap for Parliament to debate
  • better recognition of caring responsibilities in the state pension system
  • removing any aspects of the UK’s pension system that directly or indirectly discriminate against women.

Prospect’s report on the gender pension gap contains more information about this issue.

In April 2019 Prospect’s senior deputy general secretary wrote to the Chief Executive of the Equality and Human Rights Commission to request a formal investigation of the Secretary of State’s failure to tackle the gender pension gap.

In June 2019 Prospect’s pension officer wrote a blog about a legal case challenging past increases in women’s State Pension Age and recent research on the gender pension gap.