Female pensioners losing almost £200,000 as pandemic increases gender pension gap

Pensions: Money Box caller talks impact of age differences

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The study carried out by the Centre for Economics and Business Research showed that women are losing six figures of their pension when compared to men despite contributing more of their income to pensions. The current gender pension gap sits at £183,936, almost £30,000 more than the 2020 gap as the pandemic influences the economy.

The researchers suggested that the gap likely increased due to the decreasing value of pension pots as the economic crisis followed the coronavirus health crisis. 

Roughly 30 percent of women that were polled in the study noted that their financial situation had worsened during the pandemic, affecting their ability to contribute to their pension pots. 

This is in comparison to around 25 percent of men polled in the study. 

Romina Savova, CEO and founder of PensionBee, is outspoken on this topic sharing that the critical issue of child-care responsibilities are the root cause behind the gender pensions gap which worsened during the pandemic. 

She noted that the gender pay gap translates into a large gender pension gap as time compounds the minor differences in salary between men and women early on in their careers.

Noting that what starts as a 10 percent gender pay gap in one’s early years can turn into a 50 percent gender pension gap far later in life.

“When men and women enter the workforce, generally we are paid equally, however, over time there starts to exist a pay gap between men and women and usually it’s around the time that women start having children and taking time off work,” she commented. 

This gradual loss of wages is due to increased amounts of unpaid responsibilities that women take on when they have children. 

As women take on more of this unpaid work in the home than their partners, this translates to less time doing paid work, compounding in hundreds of thousands lost over the years.

Ms Savova explained: “As you take time off work your earnings potential reduces while your partners earnings potential increases because they continue to gain experience while you are taking time off to look after your children.

“Then by the time you return to work you still have child care responsibilities so actually throughout their lives women tend to work fewer paid hours than men and more unpaid hours than men.”

The study conducted by the Centre for Economics and Business Research noted that during the pandemic, women were also more likely to lose their jobs or be furloughed. 

This is due to the fact that women were found to make up the majority of low-paid, precarious jobs in sectors that were the hardest hit by the pandemic such as hospitality. 

Analysing the gender pension and pay gap, the study found that the average woman would have to work an extra 14.5 years to catch up with the salary and pension contributions of their male counterparts. 

The Independent also recently reported a study that found the gender pay gap is largest in the over-50s working group. 

Additionally, an estimated four million women were impacted by the state pension age increase. 

Ms Savova shared that solving the gender pension gap doesn’t start and end with equal pay, noting that childcare responsibilities and social mindset are also to blame. 

“The only intervention that works is shared childcare responsibilities between men and women which translates into equal parental leave and also equal availability of reduced hours during those crucial years that a child is unable to look after themselves.”

By introducing paternal leave policies and equally beneficial financial incentives for men will encourage a shared amount of unpaid duties.

“By definition men and women will work similar hours and get paid similarly and take on the same amount of unpaid care responsibilities – that’s the way to solve it,” she added. 

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