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03

Gender pension gap highlighted on International Women's Day

Open-access content Wednesday 7th March 2018 — updated 5.50pm, Wednesday 29th April 2020

Four in ten women in the UK feel nervous about the impact starting a family might have on their career – a life choice often cited as a cause of the ‘gender pension gap’.

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A report published today by PwC to mark International Women's Day reveals 44% of women worry how motherhood will affect their job, while 48% feel overlooked for promotions after starting a family.
      
In addition, over a third think taking advantage of work-life balance flexibility programmes has negative career consequences, with many not trusting what their employers tell them about career development.

This comes after previous research from Aegon found that women typically have half the retirement savings of men by the time they reach 50, with the gender pension gap found to dramatically widen with age.

The firm said an 8.9% gender pay gap, along with disrupted working patterns, make it particularly difficult to achieve pension equality, finding that 49% of women are not confident of having a comfortable retirement.

"It's shocking that 100 years after women secured the vote, we have a gender pay gap," Aegon head of pensions, Kate Smith, said. "The fact that the gap filters down to mean women receive lower pension incomes is a double blow.

"When you factor in that women's ability to save is further interrupted by breaks in their career to raise a family or care for elderly parents, the pension gap reaches epic proportions."

Aegon found that more than one in four women don't know how much they have saved, compared to just 9% of men, and that 42% have never thought about how much they will need in old age.

This is thought to be particularly pressing for women considering they live longer on average than men, meaning their retirement could often last longer and be more expensive.

It is also thought that the criteria for pension auto-enrolment makes it more difficult for women to save than men.

Under the current rules, those eligible for a workplace pension must earn at least £10,000 a year from a single job, however, women are more likely than men to have multiple part-time jobs.

"We know that more women than men don't meet the eligibility criteria with almost a third effectively being excluded from workplace pensions as they earn less than £10,000 a year," Smith said.

"Auto-enrolment doesn't allow for people with multiple jobs to combine their earnings and with women being more likely than men to have multiple jobs, this creates a problem for the future.

"This discrepancy will continue to fuel pension inequality unless changed."


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This article appeared in our March 2018 issue of The Actuary .
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Latest news from the IFoA's Council

We held our most recent Council meeting across dual locations – London and Mumbai – as 19 Council members travelled to India for a trip coinciding with the Global Conference of Actuaries (GCA), the largest annual gathering of actuarial professionals in South Asia.
Wednesday 7th March 2018
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Spike in insurance switching recorded

The number of UK adults that switched their car insurance provider increased from 22% in 2016 to 27% last year, according to new research from GoCompare.
Wednesday 7th March 2018
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Health insurers 'dragging their heels' with ineffective digital marketing

The UK health insurance sector is lagging behind other financial services in its ability to implement effective digital marketing campaigns, despite growing online interest from consumers.
Friday 9th March 2018
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One in five UK businesses need Brexit transition deal to operate as usual

Thousands of businesses across the UK face an uncertain future, with one in five unable to operate as usual after March 2019 without a Brexit transition deal agreed.
Monday 12th March 2018
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2

Spring Statement - UK GDP growth upgraded for 2018

The Office for Budget Responsibility (OBR) expects UK GDP to grow by 1.5% this year after previously forecasting an expansion of 1.4%, Philip Hammond revealed today in his spring statement.
Tuesday 13th March 2018
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MiFID II ranked a top concern for European asset managers

Some 83% of asset and wealth management firms are “somewhat or extremely concerned” about over-regulation this year, according to a global survey of CEOs by PwC.
Tuesday 13th March 2018
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