Startling findings from the Gender Pension Report, conducted by the Government Actuary’s Department (GAD), have unveiled a staggering 49% disparity in average pension funds between men and women in the UK.
The GAD’s analysis of the gender pension gap revealed that the average male pension stands at £8,466, while their female counterparts receive a significantly lower average of £4,285 – representing a concerning 50% difference.
Further examination of the data exposed a 46% contrast in legacy accrued final salary benefits between actively contributing men and women. Additionally, actively contributing women experienced a 35% disparity in post-2014 accrued career average benefits compared to men.
These stark figures have been meticulously recorded and reviewed to provide indispensable evidence for shaping Government policies on pension schemes. Fraser Stewart, Chief Commercial Officer for FinTech platform Lyfeguard, emphasised the importance of equitable pension opportunities, stating, “Pensions are an important aspect of people’s lives due to the sheer amount of time people spend working towards them, so it is vital that there are equal opportunities to earn a fair pension fund for life after work, rather than face a significant gender disparity.”
The report’s findings shed light on the broader challenges individuals face in managing their pensions. According to Lyfeguard’s research, a staggering 52% of Brits struggle with important document management, including pensions. This lack of knowledge and engagement can adversely affect wellbeing, exacerbating the already stark gender pension pay disparities.
Gender pay gap
Moreover, the Gender Pension Report has underscored the disparities within pay, working patterns, and rates of individuals opting out of Local Government Pension Scheme (LGPS) membership. Four years ago, a study by the Local Government Association (LGA) revealed a mean gender pay gap of 6.1% and a median gender pay gap of 4%, further exemplifying the obstacles women face in achieving financial parity.
The significant difference in pension payments also highlights the detrimental impact of career breaks and part-time work on women’s pay and subsequent pension funds. Addressing and rectifying this imbalance should be a priority, requiring concerted efforts from policymakers and organisations alike.
The Gender Pension Report serves as a wake-up call, demanding urgent action to ensure equal opportunities and fair remuneration for women in retirement. Bridging this gender pension gap is a matter of justice and a crucial step towards building a more inclusive and equitable society.