4 ways employers can help close the gender pensions gap
The latest data from the Department of Work and Pensions report shows that the gender pension gap stands at 35%. This is massive when compared to the gender pay gap, which is 8.3% on average.
The world has come a long way since the days when women weren’t even allowed to open bank accounts, or get a credit card in their own name without the signature of their father or husband.
And yet, despite all of the progress women have made in the world of work and money, gender gaps persists.
One of the biggest gaps that affects impacts women is the gender pension gap, where women retire with pension pots a fraction of the size of those of their male counterparts. This is exacerbated by the fact that women live longer on average than men, making them more likely to experience poverty during later life.
How the gap grows
A close look at the data reveals that the gender pension gap is narrowest when women are in their 30s. From their 40s, their pension savings begin to fall behind mens’. These trends play out similarly to what we see with the gender pay gap.
There are several reasons why this happens.
- Women are often the ones doing unpaid care work, taking time off work or reducing their hours to look after children and older family members. So they aren’t accumulating money into their pensions at the same rate as men.
- The gender pay gap adds to this – a lower salary means less going into someone’s pension pot during their working life.
- Women are less likely to invest compared with men, which contributes to a wealth gap.
How employers can support women workers
- Offer holistic financial wellbeing solutions as part of their employee benefits to help women increase their money confidence and help them plan their financial future earlier in their careers.
- Encourage women to talk about these issues and share their experiences so they can go into this part of their lives fully prepared.
- Be open to the flexible work practices required for women to be able to balance their work with parenting and caregiving responsibilities.
- Offer equal paid maternity and paternity leave and encourage male employees to take the full amount.
Access to one-to-one money advice can be life-changing, especially for women. When employers give women access to an impartial money coach, they offer them an opportunity to have those all-important conversations about their financial future, and also the chance to work with someone to create a tailored plan that empowers them to make the right decisions about their finances.
It’ll take a bigger social and cultural shift to close the money gaps between men and women for good. But the steps employers can concretely take along the way to support their female workforce will go a long way in the interim.
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