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2 March 2016

Women have barely half the pensions savings of men

If a reminder of the importance of closing the gender and ethnic pay gaps were needed, a new report from the TUC provides it, for according to a new TUC-sponsored report, The Under-pensioned 2016, women and BME workers have barely half the pension savings of white men on median earnings.

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 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 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 report says reasons for the disparities include workplace discrimination, job segregation and the lack of flexible working.

The disparities matter because:


  • They indicate a danger of living in absolute poverty.
  • However, those with incomes at or just above the poverty line may not necessarily have sufficient income to meet a personal adequacy target or achieve an acceptable standard of living which includes “having what you need in order to have the opportunities and choices necessary to participate in society”. 
  • Having lower than average income and lower relative spending power than one’s peers is associated with health and social problems.
  • Having a relatively low income in retirement can be the result of life-long disadvantage extending beyond working age and can therefore indicate particular vulnerabilities and the need for support and social policy intervention.

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