Pensions - Articles - Closing the gender pay gap is a crucial first step


Catherine Stewart, Retirement Expert at Scottish Widows comments on savings & retirement gender gap

 The gender pay gap highlighted by Equal Pay Day is only the start of the financial divides between men and women. This inequality carries through to later life, as women’s retirement prospects are generally worse than men’s. The persistent gender pay gap, maternity leave and career breaks can all hold back women’s earning potential and this often impacts pension savings.

 “Closing the pay gap is a crucial first step, but we must also level the pensions playing field. As a starting point, we recommend that the government adjust current restrictions on automatic enrolment (AE) in to a workplace pension scheme. Almost a third (32%) of women who work part-time earn less than the £10,000 qualifying earnings threshold and are missing out on valuable employer contributions.

 “This is an unfair barrier, so scrapping the minimum earnings threshold would make pensions more inclusive for part-time working women. We also recommend lowering the minimum age for automatic enrolment from 22 to 18, as this would give some women four extra years of saving to help mitigate future periods of part-time work later in life.”

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