Today (4 April 2019) all companies in the UK employing 250 staff or more are required to submit data relating to their gender pay gap which stands at 18% when considering part-time workers. Whether we will see a positive impact from this reporting remains to be seen.
A YouGov poll released just yesterday found that 80% of women and 62% of men felt that more must be done to tackle unequal gender pay in Britain but has the same ever be asked about gender inequality in older age?
Our helpline team answers calls every day from older people that are anxious about their ability to meet everyday costs. The Joseph Rowntree Foundation finds that 1 in 6 older people live in poverty compared to 1 in 8 workers, despite this there is a pervasive stereotype of home-owning baby boomers. Unwittingly these beliefs undermine the position of older women, for whom age and gender interplay to create a double financial jeopardy.
What we know so far
Relatively little is known about the gender pension gap both by government and the public more broadly.
Analysis undertaken by pension provider Aegon in 2018 found that by her 50th birthday, a woman has accumulated only half of the pension savings of a man, estimated to be £56,000 compared to £112,000. This gender inequality continues beyond the grave as Independent’ Age’s bereavement report Good Grief highlights. Upon the death of their partner a woman’s household income decreases by £34 per week, in contrast a man’s increases by £12 per week.
Department of Work and Pensions (DWP) data alone does not provide a clear picture of the problem but findings from the trade union Prospect provide greater clarity, putting the gender pension gap at almost 40%.
Causes of the gender pension gap
Unsurprisingly no single factor can be identified as causing the gender pension gap, rather a lifetime of income inequality, uneven caring responsibilities and government policies all work together to the detriment of women’s financial security in later life.
As women are responsible for the bulk of caring responsibilities, both in childcare and caring for older relatives, the position of part-time working women must not be overlooked. Caring roles also impact the number of years women are able to contribute to their pension as these duties make women more likely to take breaks from paid employment.
Government policies such as the pension auto-enrolment scheme grossly overlook the position of part-time working women, many of whom fall short of the £10,000 salary threshold. The Pensions Policy institute estimates that whilst 16% of men are ineligible for auto-enrolment, a staggering 32% of working women are missing out on vital contributions.
Remedying the gap
Fixing gender inequality requires more than one solution but by confronting today’s gender pay gap, the economic disparity that retired women in 2019 face, can be alleviated for future generations of women.
The government’s introduction of gender pay gap reporting is a welcome step yet much more action is needed in order to eradicate gender income gaps across all ages. Eliminating the £10,000 earnings trigger for the auto-enrolment scheme would be an important first step. Critically far more must be done to capture the extent of the gender pension gap, the collection of data relating to both married and single people would be one way to address this.
For more information on gender and ageism, see our Ageism+ blog series which highlights the impact of financial insecurity in older age and how gender impacts women in later life.
If you would like advice about financial security in later life you can call our helpline for free and impartial advice. Our dedicated helpline team can be reached at 0800 319 6789.