UK pensions gender gap widens in past decade, figures show

https://www.theguardian.com/business/2018/mar/26/uk-pensions-gender-gap-widens-past-decade-figures

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The gender gap in UK retirement incomes has widened dramatically over the last decade, with the average single woman now £85 a week behind her male counterpart, according to new data.

The findings come as companies and organisations continue to report the difference between what they pay male and female staff ahead of the 4 April deadline set by the government, and suggest that gender pay inequalities do not stop after people retire.

Steve Webb, the former Lib Dem pensions minister, said the figures revealed a shocking surge in the gap between older men and women.

“Much more needs to be done to tackle the disadvantages faced by women in the later-life jobs market, as well as doing more to ensure women are building up better pensions in their own right in the future,” he said.

Webb is the director of policy at the mutual insurer Royal London, which issued the figures after a detailed analysis of newly published statistics from the Department for Work and Pensions. It said that in 2006-07, the average retired single woman had a gross income of £294 per week, while her male counterpart received £325 – a gap of £31 per week.

But by 2016-17, the gap had nearly trebled to £85, with the average woman on £316 per week and the average man on £401, the company said. The data showed women’s incomes had risen by 7% in real terms over the period, compared with a 23% increase for men, it added.

Webb said his team looked at a 10-year period to iron out year-to-year fluctuations in the data, but the deterioration had all been concentrated in the last two years.

The widening gap appears to be driven by two factors. One is that the real earnings of women over pension age have been pretty flat, while those of men have more than doubled. Over the last decade, according to the data, the real earnings of single women in retirement actually fell slightly – from £21 per week in 2006-07 to £19 in 2016-17. But for men, the average increased from £17 per week to £37.

Meanwhile, occupational pension incomes have risen for both men and women – but with a particularly sharp increase for men. Women’s average workplace pension income has risen from £58 per week to £81 over the decade, but men’s workplace pensions have shot up from £83 per week to £125, stretching their lead over women.

Insurer Prudential has previously said that women could end up losing out when it came to retirement incomes because they took career breaks and changed their working patterns to look after dependants. As a result, many women will end up with smaller pension pots and some are likely to receive a reduced state pension too.