Women have barely half the pension savings of men, according to a new TUC-sponsored report.
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.
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.
TUC General Secretary Frances O’Grady said:
“Today’s 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.
“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.”
The findings reveal that women, as well as having barely half the pension savings of men, also receive a far smaller state pension. Women receive 13 percent (£1,092) a year less than the average state pension and 25 percent (£2,548) a year less than men get from their state pensions.
Carers typically have just £5,800 in savings in defined contribution schemes – 44.8 percent below average. And carers have only £6,000 amassed in defined benefit schemes – a massive 86.2 percent below average.
In regards to Black Minority Ethnic (BME) workers, an Indian worker typically has less than half (£22,100) of the defined benefit pension savings of a white worker (£45,500). Black pensioners receive 16 percent (£1,404) less than the average for all pensioners and 20 percent (£1,820) less than white pensioners in State Pension.
Self-employed workers typically have 4.8 percent less in defined contribution savings and 12.7 percent 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 report warns that despite recent changes to state and workplace pensions, these stark divisions will remain unless the government takes further action. It states 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.
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.
“Though pensions policy has played a role in supporting adequacy, the underlying causes of retirement income disparities cannot be tackled solely through pensions policy,” said Head of Policy Research at the PPI Daniela Silcock.
“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,” Silcock added.