The Pensions and Lifetime Savings Association (PLSA) comments on gender pension inequality on Equal Pay Day.
Nigel Peaple, Director of Policy & Research, PLSA said: “The PLSA applauds The Fawcett Society for highlighting the gender pay gap on Equal Pay Day. Pay inequality is a contributing cause of the gender pension gap, which sees women retiring with less money saved over their lifetimes than their male counterparts.
“Research has shown that the median private pension wealth of women in their early 60s is one third of men’s private pension wealth.
“Not only do women earn less than men on average, they are also more likely to work part-time or take career breaks during their working lives – usually to care for children or elderly relatives. Divorce also has a disproportionately negative impact on women’s retirement incomes compared to men.
“Many of these structural issues are societal; but the PLSA advocates for pension policy changes that can improve pension outcomes for women. These include removing the lower earnings threshold so that savings under automatic enrolment count from the first pound earned, and calling for a central fix to HMRC processes to address the tax anomaly that is leaving 1.75 million of the lowest paid pension savers missing out on tax relief – 75% of those affected are women.
“Other practical measures could include improved guidance for employees who are considering taking a career break or working part-time so that they are fully informed how this would affect their pension. We will continue to work with the Money and Pensions Service to prioritise women’s financial wellbeing.”
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