How to find your gender pension gaps – and tips for closing them

With woman more likely than men to take career breaks, work part time or have multiple jobs, it stands to reason their pensions are more likely to suffer

The gender pension gap, that wedge of inequality that divides men and women’s financial futures, remains stubbornly high. Cushon’s recent research shows that on average, women across all age groups have 55% less in their pension pots than men.

As the bridge between employees and their workplace pensions, employers are in an ideal position to make change happen. But to find and close the gaps, they need to be made visible, and that starts with an audit.

The first thing to acknowledge is that the gender pension gap isn’t just about numbers – it’s also about gaps in knowledge, confidence and opportunity.

Cushon’s research shows women are twice as likely to take a career break, twice as likely to work part-time and more likely to work multiple jobs. This all means fewer opportunities to save into a pension – if any at all. And as women are more likely to be on a low income, they are less likely to meet the £10,000 earning trigger for auto-enrolment.

Start with a survey

Surveys are a great way to see who needs help and where to focus your efforts. Bear in mind that your employees may not wish to share their full financial details, so it’s best to ask questions like:

Have you taken any career breaks?
Do you know where your pensions are?
How much do you intend to retire on?
How confident are you with managing your pension?

Take a look at your workplace pension contributions

You should have data on who is in your workplace pension scheme, how much they’re contributing and whether they dropped out at any point. If you see that anyone has opted out or only contributes the minimum, it could be because they don’t understand the tax benefits of a pension or even that you contribute.

Fewer than one-third of employees say they pay into a pension because of the tax relief. It’s also another key area where gender plays a part: whereas 37% of men are motivated by tax relief, this drops to 27% of women.

Ditch jargon and complexity

Pensions are confusing to the uninitiated and it’s not helped at all by the language that surrounds them. Jargon is everywhere, but it doesn’t have to be in your own pension communications. Audit your emails, fact sheets or whatever else you give employees to introduce them to their pension and ask yourself if they do enough to explain all the benefits – in plain English.

Once again, the perceived complexity of pensions hits women harder than men. Cushon’s research shows that women are typically more cautious than men, taking on less risk and making fewer investments. This disengagement is a big problem for pensions, which are so vital for later life but so ignored they often go missing entirely.

The answer, in short, is visibility and education. And people know this – 53% of employees say they would save more into their pension if they understood it better. That figure rises to 57% among women, so they’re even more open to receiving help.

3 top tips to close your pension gender gap

Education. Help your people learn and improve their confidence to start a domino effect of positive outcomes. Remember to use surveys and contribution data to find any specific problems. And make extra effort to provide support around key life stages, such as when women go on parental leave.
Encourage employees to catch up with any missed contributions. Career breaks and parental leave can really set back a person’s savings, so provide calculators or tools as well as tips and tricks. Make the process easy to understand and the benefits clear to see.
Use the momentum from national events like Women’s Day to get people engaged with your communications. As people will already be thinking about equality and opportunities for women, it’s a great time to show how you can help. Recirculate your educational content and consider hosting a topic-specific webinar.

When we find and close the pension gap affecting employees, we’ll be one step closer to a fairer, more financially inclusive world.