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The Actuary The magazine of the Institute & Faculty of Actuaries

UK government urged to pay pensions for mothers and carers

The UK government should pay public money into the pensions of women who take time out of work to care for family members, the Social Market Foundation (SMF) has said today.

Gender pension gap could widen ©iStock
Gender pension gap could widen ©iStock

In a new report, the think tank reveals that just 20% of women aged 35-54 believe they share caring duties equally with a partner, compared with 37% of men this age.

It also reveals that median wages are £8,400 higher for males than females 10 years after graduation, and that women can expect around half as many pension savings in their late 50s. 

The SMF said that rising life expectancies could see men working even longer than women, leading to further wage disparities and wider economic gaps between the sexes.

“For all the strides we’ve made towards equality, social attitudes that push women to give up work to care for children and parents remain strong,” SMF chief economist, Kathryn Petrie, said.

“To prevent the pension gap widening further, the government should consider contributing directly to the pension pots of individuals who take time out to have children or care for family members.”

The report highlights how the Office for National Statistics estimates that a women on maternity leave carries out unpaid work worth £762.75 a week – well above the average wage.

Applying the current 3% minimum contribution rates from automatic enrolment, the researchers estimate that the government should contribute £22.88 per week to that woman’s pension pot.

And although a more equal distribution of work and care between men and women could help address the gender pension gap, it seems many men don’t think they have the same opportunities.

The report reveals that 33% of men believe that a request for flexible working to care for a partner or relative would be turned down, compared to 27% of women.

“Rising life spans are a good thing, but if we don’t have the right policies to respond, they could amplify financial differences between men and women," Petrie continued.

"As well as trying to give women and men more flexibility and choices, government policies should do more to help women with the financial implications of taking time out of work.”

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