Women’s savings are being cut due to part-time work leaving them £105,000 worse off than men in retirement, research conducted by the Pensions Policy Institute (PPI) and Now Pensions revealed.
Now Pensions’ Facing an unequal future – closing the gender pensions gap report – which includes the PPI’s research – revealed women who balance part-time work with caring responsibilities are facing a 47% reduction in their pension pots compared to men by their late 50s.
The research shows that, by their 60s, women typically have £51,100 in their retirement pots while men have three times this with savings typically sitting at £156,500.
The report reveals for women to accrue the same amount as men, they would need to save 5%-7% more by retirement age.
This “part-time pensions penalty” has a bigger impact than the gender pay gap, which cuts women’s pension savings by 28% as a result of them typically earning 18% less compared to men in their lifetime.
Now Pensions interim trustee chairwoman Joanne Segars said: “[Women] are much more likely to work part-time or take time out of the workforce to care for children or elderly relatives.
“This time out of the workforce has a huge impact and the part-time pensions penalty can’t afford to be ignored.”
Auto-enrolment limitations can also leave women with smaller saving pots than men in retirement as a part-time salary may leave them ineligible if they do not meet the £10,000 threshold – meaning they will miss out on additional saving and receiving valuable employer contributions.
The Fawcett Society – a charity campaigning for gender equality – chief executive Sam Smethers said the “shocking pensions gap that women experience” could be reduced if we “lowered the threshold so that more low paid women in part-time work could benefit”.
The People’s Pension director of policy Gregg McClymont stated the gender pensions gap is “stark”, adding: “If we’re going to tackle pensions inequality, not only are changes to auto-enrolment required but better provision of affordable childcare is a must to enable those mums that want to keep working or work more hours, to be able to.”