Gender pension gap reporting is now in force for the LGPS 2025 valuations. The results are due by March 2026 and will provide the first crucial insights that can be used to narrow the gap. The leading pensions and financial services consultancy believes this information should be taken by each Fund and used to drive positive change. This can be done through collaboration with employers on tactics, such as providing targeted holistic financial education to address some of the specific challenges faced by women.
Research[1] shows that financial literacy in women can be an important tool in providing the confidence and steps necessary to supplement challenges like navigating their pensions. Collaboration between Funds and employers should focus on creating tailored communication and guidance. The goal with each piece of communication should be to give women the tools they need to unpack their own finances and take informed decisions, adds the consultancy.
Commenting on the benefits of improving financial literacy to help reduce the Gender Pension Gap, Greer Flanagan, Principal Consultant, Hymans Robertson, says: “While it’s good to see that clear improvements are being made to address the Gender Pension Gap, challenges still remain. Effective engagement requires the recognition that pensions don't exist in isolation; women must also have confidence in managing daily financial challenges like debts and budgeting to secure better stability in retirement. Financial literacy and confidence levels are disappointingly low across the UK. As a result, people struggle to prioritise long-term planning when immediate financial pressures dominate their thinking. To tackle this, Funds and employers should work together on financial education initiatives targeted at women.”
On the benefit that targeted holistic and co-ordinated multiemployer initiatives could have on the Gender Pensions Gap, Greer adds: “Holistic financial education that supports both short-term needs and long-term planning will ultimately drive stronger engagement by women in their finances and retirement planning. Coordinated multi-employer initiatives can make a real difference. When women understand the expected income their LGPS pension is likely to give, they are more likely to look at taking practical steps, like Additional Voluntary Contributions, that will help close the gender pension gap."
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