The press has already reported on significant discrepancies between male and female pay in all sorts of industries. No doubt when all companies report their figures by April 4th, analysis of the difference in the average pay for all male and female employees will demonstrate that despite equality legislation, male and female pay has not been equalized.
A significant factor of this pay gap is that it also has an impact on retirement income too –which means that the pay gap inequality continues throughout a woman’s entire life.
Scrutiny of the recently published statistics from the Department for Work and Pensions by insurer Royal London has shown that the gross income of a retired single woman was £85 (per week) less than a man’s. Shockingly the figure appears to have trebled since 2006-2007 and most of that difference has occurred within the last couple of years.
According to the government figures, the real earnings of single women in retirement was £294 per week in 2006-2007 and £325 for men – a gap of £31. However, in 2016-2017 women were on £316 and men on £401, which means the gap had trebled to £85. One explanation for the figures is that while occupational pension incomes have risen for both men and women, men have seen a particularly sharp increase from £83 per week to £125, compared to women’s £58 to £81 per week over the last ten years.
The pension income gender gap can hit women in both private pensions and some state pensions too. Part time work is predominantly done by women, the low paid employment sectors such as caring and hospitality are dominated by women, far more women than men take time off work to raise children – and of course, there is the gender pay gap itself.
This means that holes in pension saving are very difficult to fill and research by trade unions last year found that female dominated industries were ‘pension black spots’ for women as even auto enrolment currently leaves part timers and the low paid behind.
We hope that over the longer term as the gender pay gap continues to receive the political attention it deserves and more companies either address the problem themselves, or are shamed into taking action – the gulf between the pension outcomes of men and women will close. However, in 2018, 48 years after the Equal Pay Act was introduced it’s a sad indictment of the system to see that not only do many women continue to be paid less than men, but that their retirement income gap is actually getting worse.