Pensions Minister Laura Trott has told a pension industry event there is “no easy solution” to the pension gender gap.
She was responding to DWP figures released yesterday that showed the gap was 35%.
Ms Trott said: “I think that the things the Government have done recently in terms of childcare support will help address it because the pensions gap is largely a function of the pay gap at times.
“It’s a multi-faceted problem, there’s no easy solution, but when you measure something I do think you tend to focus on it more.”
Between 2018 and 2020, a median average woman aged 55 to 59 had £94,000 on average built up in private pension wealth, while an equivalent male had £145,000, according to the data.
Asked about raising people’s awareness of their pensions, Ms Trott said: “I think there’s been some great work done by industry… and I hope the pensions dashboard (which will eventually enable people to see their pension pots in one place online) will take that further as well.”
She said the key to pensions dashboards will be “getting people to use them”.
Melissa Blissett, senior consultant – pay gap analytics and financial wellbeing at Barnett Waddingham said employers must speak to staff to identify where the blockers to saving are, while also reviewing their pension offering’s design to ensure equity across the workforce.
She said: “The Department for Work and Pensions’ reveal of a 35% gender pensions gap seems stark, but in reality it is just the thin end of a much larger wedge.
“The headline figure is based on pension pot values, but if we look at women’s life expectancy in the UK, which is higher than men’s, we have a dangerous combination of a smaller pot size and more years to fund for.
“What’s more, our research has observed contributions from women dropping below men’s as time goes on, with men contributing £500-1,500 more than women after their 30s.”
Louise Davey, director of policy, analysis and advice at The Pensions Regulator, said: “TPR is committed to working with industry and government to understand saver inequalities and create a workplace pension system that works for everyone.”
She said the successful roll-out of auto enrolment has had a huge impact on the savings landscape, driving up the number of people saving up for their retirement, including many women for the first time.
“In our role as regulator, we will continue to use our compliance and enforcement powers to protect savers and ensure all eligible workers get the pension they are entitled to.”
