Women must make sure they don’t lose out on retirement income

Work patterns mean there’s no gender equality in the pension pot so be prepared, writes Amanda Jack

We have all heard of the gender pay gap. Less is spoken of the gender pension gap: the difference in the retirement income of men and women. The gender pension gap hits close to home for me, as my mum has fallen victim to it. My dad was the main earner in the house and frequently worked overseas. As we lived away from family who could be relied on for childcare, my mum stopped working as a nurse to raise me and my brother.

Although she received a National Insurance credit for the state pension during these years, she missed out on a workplace pension. When she returned to work, it was on a parttime basis and at a lower salary than she could have received had she not taken a career gap. These factors have

resulted in a stark difference between my mum and dad’s pensions.

Some may assume the gender pension gap is a problem of the past, and the work on the gender pay gap and equalising the rights of women in the workplace has addressed this problem too. Worryingly, they are wrong.

A recent Scottish Widows report revealed that women currently in their twenties will retire with a pension worth, on average, approximately £100,000 less than that of a man of thesameage.asa26-year-oldwoman at the start of my career, it is shocking tome th a ti might retire with a pension pot which is so much smaller than that of my male peers. The explanation for such a gap is sadly all too familiar–taking a career break to care for children or family members, working in low paid roles or part-time. covidw ill inev

itably also have an impact. The retail sector has been shattered by the pandemic and it is widely accepted that women, who make up the majority of workers in the retail sector, will be impacted most. More time spent not working means fewer contributions into a pension pot.

But all is not lost – more can be done to close the gap. Auto-enrolment has meant more people than ever before are enrolled in a pension scheme... but many are still missing out. if the trigger for auto-enrolment( currently £10,000) was removed, and the minimum age lowered from 22 to 18, more part-time workers (often women) would benefit from auto-enrolment – and everyone would benefit from four more years of pension contributions. Employers can of course choose to do this on their own – they don’t have to wait for the government to change the law. increasing the default contribution rate from 8 percent would likely have the greatestimpact–it is generally accepted that saving only the minimum of 8 percent of salary will not been ought olive comfortably in retirement.

Another option, mentioned by Scottish Widows, would be to introduce enhanced maternity pension contributions – i.e. maintain contributions on the basis of pre-maternity pay. This would start to address the career gap many women face when taking time to raise a family. The easiest step is to raise awareness. If women are aware of the gender pension gap as soon as they start working, they can take steps to mitigate it. But men should also be aware and help with this challenge.

If a more equal world is a better one – why should that stop at retirement?

Amanda Jack is a solicitor with Burness Paull LLP