If men’s pensions were crap. It would have been sorted by now!

womens pension gap

This is a direct quote from my lovely wife. She is a passionate, objective and thoughtful feminist. 1) What was she on about and 2) Why share it now?

  1. She has heard me share statistics about the state of women’s pension compared to men’s and yesterday I added more to her knowledge bank – she wasn’t happy about it!
  2. Because the NOW:Pensions conference yesterday, “Closing the gender pension gap” was exceptionally helpful to me in understanding where we are at, why and what we can do about it

Unlike me, there are no gags in this blog. I was pretty dumbstruck by some of the stuff I jotted down at the event, so it requires me to be concise and to the point.

And although some of my industry buddies will groan and say, “yeah but James, NOW have had negative comments in the press…..” I can’t praise them enough for this event.

If this is a sign of their intent and with the approval now restored, I have every confidence in their ability to be a valued part of the master trust market.

Where are we at then? – Well the stats are pretty horrible unless you are a man. Here is the headline:

Women have a 1/3 of the pension pot of a man at retirement. 

This has been well reported on and is shocking as a headline. But the stats I jotted down as to why blew me away:

Why are we here?

  1. 75% of those ineligible to be auto-enrolled are women. This means they are missing out on vital contributions from the employer.
  2. 75% of part-time work is done by women – can you see the link with 1?
  3. Their income doesn’t hit the triggering earning threshold
  4. A female apprentice earns 21% less than a male apprentice
  5. 61% of women returning from a career break do so part-time
  6. Women in part-time roles earn 30% less per hour
  7. Part-time working leads to a 47% smaller pension pot – and 3 out of 10 women don’t realise this
  8. 3 out of 5 returning from a career break return in a lesser skilled role or job

These were the headlines in a great session delivered by Jane Portas of PWC, quoting research findings in “Risk, Exposure and Resilience to Risk in Britain Today” – Women’s Risks in Life. I probably haven’t done this justice. And my note taking was under pressure due to the huge volume of evidence.

What can we do about this?

This is most important part in my eyes. There is no point reporting all of this without considering what can be done about it. So here I am giving the “what” response on two levels – what can we do about it and what can I do about it.

What can we do? – I am indebted in this response to the session delivered by Daniela Silcock, Head of the Pension Policy Institute. In short, my take was this:

  • Increase the amount of pension input for people who are caring for their young family. This “carer top-up” could see pension contribution deficits smoothed out and would help 3 million people (mostly female)
  • Reduce the earnings threshold for auto-enrolment to the first £1 of income. This would ensure those on part-time income would still be eligible for pension contributions, no matter how much they earn. This would include around 2 million people, currently excluded from auto-enrolment.

I can’t see any political reason why we couldn’t adopt both of these measures today. And as for sorting out the WASPI injustice……I think this is for another forum, but I fully support the cause.

What can I do? – Well I am already pretty noisy about the need for financial education (in schools would be nice, but recognising I am not going to change this) in the workplace.

My lunch and learn session “Financial Fitness for Women” has just got better, with huge thanks to this event. It will allow some stronger messaging such as:

  1. Knowing all of these stats, it would help to advance-fund a career break. This was a great suggestion from the panel debate
  2. Sort out your death nomination status – nearly half of us are currently aiming to leave our pension on death to someone we no longer love
  3. Don’t forget your pension during divorce proceedings (over 70% of divorcing couples don’t discuss pensions – I was totally wide-mouthed on this point)
  4. Be aware that co-habitation in an unmarried relationship carries none of the legal pension protections on separation

I recognise that I am liable to “well you’re a man, so you’re alright” accusations. Fair enough. But I left the event a little bit angry – with myself for not knowing all of this (and I am a Pension Geek) and for not having stopped to consider the whys.

What can one “man of a certain age” do about it? Not much probably – but doing nothing is not an option.

I was struck by a message I saw recently and I think it applies here: “You don’t have to be great to start something – but you do have to start something to be great” – So let’s get started! 

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