A recent report revealed that due to a pensions gap, the average woman faces a yearly shortfall of £7,600 in retirement income compared to men. This gap stems from disparities in gender pay at work and women’s tendency to take on unpaid caregiving roles, resulting in women accumulating only half as much in workplace or private pensions as men.
The Trade Union Congress (TUC) highlighted this ongoing inequality on Gender Pensions Gap Day, illustrating that women would cease to receive pension payments earlier in the year than men if payouts were equalized. Research by the Prospect union indicated a 36.5% disparity in retirement income between genders, more than double the average pay gap during employment.
In response to these findings, the Labour party recently reinstated the Pension Commission to investigate the root causes of this gap. TUC’s general secretary emphasized the importance of addressing these inequalities for future generations, underscoring the necessity of ensuring all individuals, especially women, receive adequate retirement income.
Prospect’s senior deputy general secretary noted a gradual improvement in the gender pension gap but warned that without concerted efforts, many women would continue to face financial disparities in retirement for years to come. The research considered retirees’ incomes from various pension sources, revealing a significant difference in average weekly and yearly pension amounts between men and women.
To address potential lost pensions, individuals are advised to utilize the government’s free pension tracing service, especially if they have changed jobs without updating their pension details. Additionally, employees should check if their employers offer pension contribution matching schemes, which can boost retirement savings. It is also crucial to assess opportunities to enhance state pension benefits through national insurance contributions or credits, and consider switching pension providers to reduce fees and improve savings.