WBG responds to PPI’s findings on Gender Pension Gap
Date Posted: Wednesday 7th February 2024
Responding to the Pensions and Policy Institute’s latest figures revealing that women face working for an extra 19 years to retire with the same pension savings as men,
Dr Zubaida Haque, Deputy Director at Women’s Budget Group said,
“Today’s PPI findings lay bare the stark financial reality for women: women retire with just £69,000 in pension savings, compared to £205,000 for men. These figures echo our gendered analysis of the Wealth and Assets Survey that revealed a jaw-dropping 92% gap in private pension wealth between women and men. This gap massively widens with age, reflecting the gendered differences and inequalities in earnings and savings throughout men’s and women’s life cycle.
“Labour market inequalities play a key part here: As men and women age, the gender gap in earnings starts to widen because of different patterns of labour market participation due to unpaid caring responsibilities. To juggle their disproportionate caring responsibilities, women are more likely to be in up low-paid part-time jobs and in precarious employment including self-employment and zero-hour contracts. This massively restricts their capacity to save and contribute to their private pensions which is why the Government must address pay and employment discrimination, alongside accessibility and affordability of childcare. Addressing the huge workforce and investment issues in social care is also fundamental to increasing women’s participation in the labour market, and their ability to invest to save and contribute to private pensions.
“We need to think carefully about proposals to reduce or scrap the auto-enrolment threshold on the lowest earners; while on the one hand it may make sense to do this, on the other hand, it forces the lowest earners, who are more likely to be women, to trade off money they desperately need in the present for future pension security. It also doesn’t address the inherent unfairness with regards to the ability to contribute and increase pensions.”
“We have warned that the measures announced by the Government in the Spring Budget last year risk widening the gender pension gap. Who benefits from scrapping the lifetime allowance for private pensions? Those who have pension pots approaching the now-abolished lifetime allowance of £1,073,100, almost entirely men. The increase in the annual tax-free allowance for private pension pots, from £40,000 to £60,000 per year will also benefit only higher earners earning enough to be able to deposit more than £40,000 in one year in their pensions, primarily men.
“The tax losses from those decisions cost the public purse and investment that could be made in social security and social infrastructure to increase women’s ability to engage with the labour market at higher levels and so improve their longterm living standards and help close the gender pensions gap.”
WBG spokespeople available for comment, contact
About the Women’s Budget Group
The UK Women’s Budget Group (WBG) is the UK’s leading feminist economics think tank, providing evidence and analysis on women’s economic position and proposing policy alternatives for a gender-equal economy. We act as a link between academia, the women’s voluntary sector and progressive economic think tanks.
Notes to editors
- The Pensions Policy Institute (PPI): The Underpensioned: defining the Gender Pension Gap (Feb 2024)
- The Women’s Budget Group: Why taxation of wealth is a feminist issue: A gendered analysis of wealth in Great Britain (Oct 2024)