Women have barely half the pension savings of men, according to a new TUC-sponsored report published today.
The study, carried out by the Pensions Policy Institute, shows that women have, on average, £7,500 in savings in defined contribution schemes, compared to £14,500 for men.
And women typically have £32,000 in pension savings in defined benefit schemes, whereas men have £62,900.
The report, The Under-pensioned 2016, reveals large pension disadvantages for women, ethnic minority workers, carers and the self-employed.
The findings show:
- Women – As well as having barely half the pension savings of men, women also receive a far smaller state pension. Women receive 13% (£1,092) a year less than the average state pension and 25% (£2,548) a year less than men get from their state pensions.
- Carers – Carers typically have just £5,800 in savings in defined contribution schemes – 44.8% below average. And carers have only £6,000 amassed in defined benefit schemes – a massive 86.2% below average.
- BME workers – An Indian worker typically has less than half (£22,100) the defined benefit pension savings of a white worker (£45,500).
Black pensioners receive 16% (£1,404) less than the average for all pensioners and 20% (£1,820) less than white pensioners in State Pension.
- Self-employed – Self-employed workers typically have 4.8% less in defined contribution savings and 12.7% in defined benefit savings than average pensioners.
The Under-pensioned 2016 report says reasons for the disparities include workplace discrimination, job segregation and the lack of flexible working.
The report warns that despite recent changes to state and workplace pensions, these stark divisions will remain unless the government takes further action. It states that workers from underpensioned groups are less likely to be eligible for auto-enrolment into workplace pensions than the wider population, typically because their wages are too low.
It explores the potential impact on underpensioned individuals of lowering the £10,000 earnings trigger for auto-enrolment, increasing contribution rates and dropping the system of banding that restricts the income on which pension contributions are based.
The TUC believes that these are key policies that the government should consider when it comes to review auto-enrolment in 2017.
The Pensions Policy Institute will launch the report officially at the TUC’s Congress House headquarters at 3pm today. Speakers will include Shadow Pensions Minister Angela Rayner.
TUC General Secretary Frances O’Grady said: “Today’s report is a sobering reminder of Britain’s stark pension divide.
“Everyone should have the chance of a decent retirement income, not just men in full-time employment.
“Women, carers and ethnic minority workers will continue to have a tough time in old age if swift action is not taken.
“We urgently need a debate on how unions, government and employers can work together to can build on the success of auto-enrolment.
“And we mustn’t shy away from looking at the underlying problems in our labour market that are driving these inequalities in pension saving.”