Today’s publication by the Government of the first official figures on the gender pension gap has been welcomed by LCP partner Laura Myers as representing a ‘vital first step’ in addressing this longstanding issue.
Although a large number of reports have been published on the topic of the gender gap, this is the first time that the Government itself has attempted to assess the scale of the problem, and has also committed to monitoring the issue on an ongoing basis.
Key findings from the figures include:
· The ‘gender pension gap’, which measures the difference in the amount of *private* pension wealth held by men and women at around ‘normal minimum pension age’ – currently 55 – (and before the pension has been accessed) is estimated to be 35%; it excludes people who have zero pension wealth;
· In 2021, around £52 billion was paid into the private pensions of women eligible for automatic enrolment compared with £62.6 billion into the pensions of men;
· By age group, the gap is smallest for those in their thirties, peaks for those in their forties, before falling back at older ages; DWP say that this pattern is ‘similar to the trajectory of the gender pay gap’
· In 2006-08, the gap was 42%; it has fluctuated since then, but is currently (2018-20) lower than in 2006-08;
Commenting on the new publication, Laura Myers, who is a member of LCP’s gender pension gap working group, said:“The publication of these statistics represents a vital first step in tackling profound gender inequalities in pensions, and Laura Trott is to be commended for getting this work done within months of coming into office. Not only does this report put the issue firmly on the government’s agenda, but it means we will be able to hold governments to account to make sure that progress is made on the yawning gap in pension rights between men and women. Although good progress has been made in recent years in reducing the gender gap in state pensions, the gap in DC pension rights between men and women is steadily growing, and risks replicating the inequalities we saw in the Defined Benefit world. We look forward to working with the Government and with others across the industry to come up with workable solutions to these longstanding problems”.