Women’s Pensions Worth a Third Less Than Men’s – How Can We Close the Gender Pensions Gap?

In today’s society, achieving financial security in retirement is a crucial concern for most people. However, a disheartening disparity persists between women and men when it comes to pension savings. Recent statistics reveal that women’s pensions are worth approximately a third less than men’s by the age of 55, highlighting the urgent need to address the gender pensions gap. This article explores the context, history, and possible solutions to close the ‘gender pensions gap’ and ensure a more equitable future for women in retirement.

What Is the Gender Pensions Gap and How Big Is It?

According to recently released data from the Department for Work and Pensions (DWP), the gender pensions gap becomes pronounced as women approach retirement age. The DWP’s research suggests that at age 55, women’s private pensions are worth around 35% less than men’s in Great Britain, reflecting a significant disparity in retirement savings.

Further examination of the issue reveals that approximately one in four women over the age of 35 have no retirement savings at all. This highlights a deep-seated problem that must be addressed to prevent a growing number of women from facing financial insecurity in their later years.

Understanding the historical and cultural factors contributing to the gender pensions gap is crucial for addressing the issue comprehensively. Women are more like to have interrupted careers due to factors such as childcare responsibilities, lower wages, and occupational segregation have a direct impact on their ability to accumulate pension wealth. Additionally, the gender pay gap, which still persists today, further exacerbates the disparity in pension savings.

Solutions to close the gender pensions gap

1. Encouraging early and continuous pension contributions

• Raising awareness among women about the importance of starting pension contributions early and consistently.
• Promoting workplace pension schemes and providing education on their benefits.

2. Addressing the gender pay gap

• Implementing policies and initiatives to reduce the gender pay gap and promote equal pay for equal work.
• Encouraging employers to conduct regular pay audits to identify and rectify any gender-based pay discrepancies.

3. Enhancing pension flexibility

• Advocating for policies that accommodate women’s career breaks for childcare or caregiving responsibilities without penalizing their pension savings.
• Introducing flexible pension options, such as the ability to make voluntary contributions during periods of career breaks.

4. Financial education and guidance

• Providing accessible financial education and guidance specifically tailored to women, empowering them to make informed decisions regarding their pension savings.
• Collaborating with employers, government bodies, and financial institutions to offer targeted workshops, seminars, and resources.

5. Increasing support for low-income and self-employed women

• Developing initiatives to assist low-income women in building their pension savings, such as matching contributions or government-funded schemes.
• Creating accessible pension options and incentives for self-employed women to encourage them to save for retirement.

Summing Up

The gender pensions gap remains a pressing issue, threatening the financial security of countless women in retirement. By acknowledging the statistical disparities, understanding the historical and cultural context, and implementing practical solutions, we can pave the way for a more equitable future.

Closing the gender pensions gap requires collaboration among individuals, employers, government entities, and financial institutions to ensure that women have equal opportunities to build secure and comfortable retirements. By taking proactive measures, we can strive towards a society where women’s pensions are valued and supported on par with their male counterparts.

If you would like to talk about any of the issues in this article or need more general help with your finances, please get in touch with us.

Share this article