Women's Views on News |
| Another pension report: another gap Posted: 02 Mar 2016 04:40 AM PST
Women have barely half the pension savings of men, according to a new report that has just been published. Sponsored by Age UK, the Joseph Rowntree Foundation (JRF), The People's Pension and The Trades Union Congress (the TUC) the report, which was carried out by the Pensions Policy Institute (PPI), 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 per cent (£1,092) a year less than the average state pension and 25 per cent (£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 per cent below average. And carers have only £6,000 amassed in defined benefit schemes – a massive 86.2 per cent 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 per cent (£1,404) less than the average for all pensioners and 20 per cent (£1,820) less than white pensioners in State Pension. Self-employed: Self-employed workers typically have 4.8 per cent less in defined contribution savings and 12.7 per cent 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. And the report warns that despite recent changes to state and workplace pensions, these stark divisions will remain unless the government takes further action. It says that workers from under-pensioned groups are less likely to be eligible for auto-enrolment into workplace pensions than the wider population, typically because their wages are too low. And it explores the potential impact on under-pensioned 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 head of Policy Research at the PPI, Daniela Silcock, said: "Differences in pension income are important because lower than average pension incomes can indicate a greater likelihood of living in financial hardship." "This report indicates positive movements in pension income for those from under-pensioned groups. "Once the New State Pension has been fully phased in there will no longer be significant differences in state pension income between women, ethnic minorities, disabled people, carers, the self-employed and the average for all pensioners. "However, lower private pension saving and income levels among the under-pensioned are projected to continue. "These mainly arise from particular labour-market characteristics found more prevalently among these groups." "Though pensions policy has played a role in supporting adequacy, the underlying causes of retirement income disparities cannot be tackled solely through pensions policy. "They involve labour-market, social and regulatory issues related to inequalities experienced during working-life. "Therefore, addressing ongoing differences in private pension income would involve a joint effort from government departments, employers, social services, regulatory bodies and community support groups." The TUC's General Secretary Frances O'Grady said: "[This] 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." To read the full reprt, click here.  |
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