New figures show Gender Pension Gap remains stubbornly high

New statistics from trade union, Prospect, provide their latest estimate of the Gender Pensions Gap.

They put the gap at 40.5% for 2020-21, essentially unchanged since the figure was first estimated half a decade ago. This is significantly more than the gender pay gap, and represents an average annual £7,100 shortfall.

The latest figures show that despite an increased focus on the gap, current government policies are failing to provide any improvement. This has led Prospect to warn of a “ticking gender pension time bomb” if radical action is not taken to address the gap.

Prospect published the figure in its latest annual Gender Pension Gap report.

Progress has been made this year in terms of reporting. After pressure from Prospect the government has agreed to look at agreeing a statutory definition of the Gender Pension Gap, and also at the possibility of measuring the gap centrally. This would make it much easier to focus on ways of addressing the gap.

Prospect is calling for:

• A statutory requirement for the government to report to Parliament on the size of the gender pension gap and its plans for tackling it.
• The DWP to include addressing the gender pension gap as one of its statutory equality objectives.
• An additional state pension credit for those who are not working because they are looking after children under 12.
• Measures to encourage more equal sharing of caring responsibilities by gender and to make affordable childcare more widely available.
• Allowing those who did not claim child benefit to receive national insurance credits to which they would have been eligible if they had claimed.
• Government to commit to completing its administrative review of underpaid state pension, affecting tens of thousands of women, before the end of 2024.
• Early implementation of the recommendations of the 2017 automatic enrolment review and lowering the earnings trigger to the level of the Lower Earnings Limit.
• An independent Commission to consider the appropriate level of contributions under automatic enrolment.
• Measures to improve appropriate sharing of pension assets on the ending of long-term relationships.
• Better collection and monitoring of data on the proportion of divorces involving pension sharing orders.
• More campaigning to encourage higher take-up of credits that can boost women’s pension income.
• Implementation of proposals to change the tax system to resolve the ‘net pay anomaly’ whereby low earners do not benefit from tax relief on their contributions.

Sue Ferns, Senior Deputy General Secretary of Prospect, said:

“This report shows that the Gender Pension Gap remains extremely high.

“Prospect’s number one ask of government has been for them to produce an official definition of the Gender Pension Gap and to report on it centrally. Progress has been made on that but we now need warm words to be matched by concrete action.

“Things are moving far too slowly. We are currently condemning generations of women to significant financial inequality in retirement. It is simply not good enough.”