An issue that has received lots of attention over recent years is the gender pay gap. However, that is only a drop in the ocean compared to a bigger issue, the pension gender gap. The upcoming release of the dashboard will hopefully result in the spotlight shining brighter on this increasingly important topic.
A recent report found that the gender pensions income gap (39.5%) was more than double the size of the total gender pay gap (18.5%), with the average female pensioner £7,000 p.a. poorer than their male equivalent.[1] A lot of people only talk about the gender pay gap, the dashboard will allow the bigger picture to be seen as it will highlight that it is not just working females who encounter a pay gap, it is female pensioners even more so.
The dashboard will enable individuals to see their pensions in one place and will help individuals have easier access to finding out how much they can expect to have at retirement. It is important that it also helps assist people when they discover that they perhaps have not planned for their retirement well enough. It is likely that the dashboard will make pensions a more popular conversation topic rather than one that is just swept under the carpet. One of the main issues likely to be thrust into the limelight is the reality that women’s pension pots are perhaps smaller than their male counterparts. It is likely to cause conversations between families and friends and perhaps the realisation that one half of a partnership may be on track to be much better off in retirement.
I brought this topic up around my dinner table tonight. At first, I was met with a blank look. However, as I kept explaining the pension pay gap the confusion turned to quite an educational discussion compared to usual conversations. I explained how around our age range, it is often women who take career breaks or drop their hours to raise a family. That in our household, this would then lead to me having less income and ultimately re-paying my student loan slower. A combination of these points would then therefore mean less pension contributions. To witness someone’s knowledge go from zero to one of shock and agreement gave me hope that the dashboard will help to do the same.
A study in 2021 showed that men over the age of 40 are more likely to plan for retirement than women, even though 85% of women take control of their family’s finances.[2][3] Research also shows that women have higher life expectancy, with three quarters of women over the age 60 being either single, widowed or divorced when they pass away, even though many do not plan for retirement.
As a woman in the pension industry, the pension gender gap is a scary topic and one that I think should be spoken about more. The dashboard will bring more attention to this issue and positive action can stem from it, if the industry uses the opportunity to help educate people too.
I hope that the dashboard will help highlight how important it is to save for retirement whatever your gender and that it will empower women to be more confident in making their financial decisions, taking more control of their personal financial matters and making their money work much better for them.[4] If the industry works together on this, I believe that the dashboard doesn’t become a ‘what could have been’, rather it becomes the catalyst to help tackle the gender pension gap once and for all.