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TUC – women more than twice as likely as men to miss out on pensions auto-enrolment

  • New analysis shows that 1 in 9 female employees are in jobs where their employer doesn’t have to enter them into a workplace pension
  • Today is ‘gender pensions gap day’ – the point at which the average woman would start receiving their pension if it was paid at the same rate as for an average man
  • The average pensions income gap between women and men is 40.5%, or £7,100
  • TUC calls on ministers to urgently fix auto-enrolment and invest in social care and childcare to improve retirement incomes for women

Women are more than twice as likely as men to miss out on being automatically put into a workplace pension, according to new analysis published by the TUC today (Monday) to mark gender pensions gap day.

The analysis shows that almost 1 in 9 women (10.9%) are in jobs where their employers do not have to enter them into a workplace pension, while the figure is less than 1 in 20 (4.3%) for men.

Employers are required by law to automatically enrol workers into a pension if they earn £10,000 a year or more, and to make contributions for them.

But 1.4 million women earn less than this threshold – potentially leaving many without an occupational pension.

Northern Ireland (15.2%), the West Midlands (14.5%) and Wales (14.2%) are the areas with the highest proportion of women employees who don’t qualify for auto-enrolment.

London (7%) has the lowest.

Young workers to miss out

Auto-enrolment does not kick in until workers turn 22, but the government has recently announced plans to lower this age threshold to 18.

While this is a welcome step, the number of young workers in low-paid and part time jobs will limit its impact.

Today’s analysis reveals that more than 1 in 3 (36%) younger women and 1 in 8 (15%) younger men aged 18-21 do not earn enough to require their employers to auto-enrol them.

Gender Pensions Gap Day

Today’s figures are published as the TUC marks Gender Pensions Gap Day – the day women pensioners effectively start getting paid their pension.

Prospect union has calculated that the income gap between men and women in retirement is now 40.5%, more than twice the level of the gender pay gap (currently 14.9%).

The huge pensions income gap between men and women means that the average retired  woman effectively goes nearly five months of the year without getting a pension.

Why is there such a big gender pensions income gap?

The TUC says the main drivers of the gender pensions income gap are:

  • Caring responsibilities: The unequal division of caring responsibilities means women are much more likely to take time out of work or work part-time to look after children, making it harder to build up a workplace pension.
  • Gender pay gap: The impact, over time, of women earning less than men due to the gender pay gap.
  • Auto-enrolment: Gaps in pensions auto-enrolment that mean employers do not have to enrol low paid workers into a workplace pension – and these are more likely to be women.
  • State pension: Historic differences in National Insurance that have left women with lower state pensions on average.

The TUC says that unless these disparities in pension wealth are tackled, the gender pension gap will persist when today’s workers reach retirement.

TUC General Secretary Paul Nowak added:

“Women taking on caring responsibilities are a key driver of the gender pensions gap and the gender pay gap.

“We need to invest more in childcare and social care, and in the women workers who overwhelmingly work in these professions. That’s a key way to close the gender pay gap.”

On the need to bring more women into pensions auto-enrolment Paul Nowak added:

“We need to fix our pension system so that all women can benefit from a decent income in retirement

“But many are missing out on having any sort of occupational pension at all. Unless ministers act now, more women will be consigned to poverty in retirement.

“Ministers should start by scrapping the earnings threshold for auto-enrolment. Workers should have the chance to build up a pension, regardless of how much they earn.”

Government action needed

This year’s gender pensions gap is the is the highest since 2015-16, when it was 40.7%. It represents £7,100 less pension income in 2020-21 for an average retired woman compared to an average retired man.

The TUC is calling on ministers to take urgent action to close the gap more quickly.

Taking better measures to address the gender pay gap – like introducing mandatory action plans along with pay reporting – would help, but the union body also wants the government to:

  • Introduce a statutory requirement for ministers to report on the gender pension gap. This should be accompanied by an action plan on how to tackle the gap.
  • Fix auto-enrolment so that it works for people in low-paid or part-time jobs. Ministers could achieve this by:
    • removing the £10,000 earnings threshold so that employers must opt all workers into a workplace pension;
    • scrapping the lower earnings limit so that contributions are calculated from the first pound of earnings;
    • setting out a timetable to increase statutory minimum employer contributions from 3% so that all workers will benefit from decent contributions.
  • Introduce funded, high-quality childcare, available to all, free at the point of use. Caring responsibilities are one of the key drivers of both the gender pay gap and the gender pensions gap. This would begin when paid maternity leave ends and would enable women to stay in work when they have children. 
  • Fix the staffing crises in social care and childcare. There are a record 165,000 vacancies across adult social care and a worsening recruitment and retention crisis in childcare. The TUC believes this is placing a huge strain on women with caring responsibilities for family members. The TUC says the government must work with unions and employers to tackle widespread insecure work and poverty pay in the care sector which are driving high staff turnover rates. 

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