Tag: Close the Gap

Gender pension gap means retired women effectively stop receiving pension from today

  • Retired women have to struggle with £7,600 a year less than men on average. 
  • Women approaching retirement have only built up half as much in a workplace or private pension as men. 
  • More action needs to be taken to close the gap for women set to retire in the years ahead. 
  • The recent revival of the Pension Commission is a much-needed opportunity to ensure that in the future everyone receives a decent retirement income. 

The gender pension gap in the UK means that retired women effectively go over four months each year without getting a pension – the equivalent of losing out on £7,600 a year on average. 

This means that compared to men, retired women effectively stop receiving pension income from yesterday (Thursday 21 August), the TUC warns.  

The income gap between men and women in retirement is now 36.5%, according to research from Prospect union – more than double the level of the gender pay gap (currently 13.1%).  

Reasons for the gap  

The TUC says that the main drivers of the gender pensions income gap are:  

  • Unpaid caring responsibilities: women are five times more likely than men to be out of paid work to look after children, elderly or disabled family members – missing out on workplace pension contributions as a result. BME and disabled women are among the worst impacted – respectively at seven and nine times more likely than White and non-disabled men to be out of work due to caring responsibilities.         
  • Gender pay gap: across their working lives, women persistently earn less than men and therefore accrue lower pension contributions. In particular, women are three times more likely than men to earn below £10,000 – the threshold for employers to have to put workers into a workplace pension. 
  • State pension: historic differences in state pension have left currently retired women with lower state pensions on average.  

Lasting solutions 

The TUC has highlighted three key solutions for narrowing the gender pension gap for women retiring in the future:  

  • Addressing the gender pay and employment gaps. This should include improving childcare and social care, continuing to strengthen rights to work flexibly as well as reforming the parental leave system to enable more equitable sharing of caring responsibilities. The Employment Rights Bill – which will introduce a right to request flexible working from day one of employment – and the Parental Leave and Pay Review are important opportunities to achieve changes.  
  • Reforming the occupational pension system so that people on low pay don’t miss out on employer’s pension contribution. This should include phasing out the £10,000 automatic-enrolment earnings threshold that excludes many women from workplace pensions and paying pension contributions from the first pound of earnings. 
  • Ensuring the pension system better recognises the value of unpaid caring and addresses the penalty faced by those who take time out of paid work because of caring responsibilities. This should include introducing a Carer’s Credit in addition to existing National Insurance credits for carers, to replace lost workplace pension contributions. This would mean carers qualify for extra state pension to replace some of the workplace pension they miss out on building up. 

The Pension Commission  

Last month, the Government revived the Pension Commission, which will bring together unions, employer and independent experts to look into the causes of the gap, among other issues.  

It aims to reach a consensus on long-term changes needed to ensure that millions of people benefit from a more secure retirement – including women.  

And where consensus already exists – like calculating pension contributions from the first pound of earnings and bringing more young workers into auto-enrolment – the government should press ahead quickly.  

This is a much needed opportunity to ensure that everyone receives a decent retirement income and the gender pension gap is closed.  

TUC General Secretary Paul Nowak said: “Everyone deserves dignity and security in retirement. But right now, too many retired women have been left without enough to get by.  

“We must make sure that these inequalities are addressed for future generations. 

“That’s why reviving the Pensions Commission – bringing together unions, employers and independent experts – is a vital step forward.  

“We now have a chance to make sure everyone, including women, receive the decent retirement income that all workers need.” 

Prospect Senior Deputy General Secretary Sue Ferns OBE said: “The Gender Pension Gap is very slowly moving in the right direction but without a more concerted effort millions of women will continue to suffer from unequal earnings in retirement for much of the rest of this century. 

“The first step was the success of Prospect’s campaign for the government to recognise and measure the Gender Pension Gap. The next step is for government to show the way as an employer and take real action to close the gap by adopting trailblazing reforms across all public sector pension schemes.

“That the gender pay gap sits at 14% is unacceptable, for the gender pension gap to be more than twice that is nothing short of disgraceful and shames a society that doesn’t take action.” 

TUC report on Gender Pension Gap can be found here.

A childcare system for all

A joint position paper created by One Parent Families Scotland and Close the Gap sets out principles for a childcare system that works for women, children and families, including those on low incomes:

The availability of accessible, affordable, and flexible childcare is critical to the realisation of women’s equality, and to improving children’s outcome in Scotland.

This position paper, produced in partnership with Close the Gap, presents a set of principles which should drive the next stages in the development of Scotland’s childcare offer.

These principles describe a system of childcare that promotes women’s socio-economic and labour market equality, advances children’s rights, and addresses child poverty.

Read the Report below

CtG-and-OPFS-A-childcare-system-for-allDownload

End Child Poverty publishes Holyrood elections manifesto

“the pandemic has pulled families even deeper into poverty, while many more have been swept into poverty for the first time. A rising tide of child poverty now threatens to overwhelm many in our communities.”

John Dickie, Child Poverty Action Group Scotland

All political parties in Scotland should commit to at least doubling the value of the new Scottish Child Payment to stem the rising tide of child poverty, a coalition of anti-poverty groups, children’s charities and women’s organisations have urged today.

The End Child Poverty coalition in Scotland made the call in A Manifesto for Ending Child Poverty: Our Priorities for the 2021 Scottish Parliament Election, launched today, in which it set out its key asks ahead of the Holyrood elections in May.

While warmly welcoming the new £10 per week per child benefit for low income families – due to begin its roll out for under 6s next month – the manifesto warns that it will not go far enough in helping to meet Scotland’s child poverty reduction targets. By increasing the payment to £20 per week, the coalition say, at least another 20,000 children could be lifted out of poverty.

As well as doubling the Scottish Child Payment, the coalition are also calling for all parties to commit to:

• Bolstering other support for low income families, including by increasing the value of School Clothing Grants and Best Start Grants;

• Ensuring crisis support is adequate and accessible, including by investing in the Scottish Welfare Fund;

• Guaranteeing holistic whole family support to all families needing help;

• Supporting migrant children and caregivers, including increasing financial support to families with No Recourse to Public Funds;

• Setting out a child poverty-focused labour market policy, including action to tackle the gender pay gap.

Launching the manifesto, John Dickie (Director, CPAG in Scotland) said: “Even before Covid-19, almost one in four children in Scotland were growing up in the grip of poverty.

“Now, the pandemic has pulled families even deeper into poverty, while many more have been swept into poverty for the first time. A rising tide of child poverty now threatens to overwhelm many in our communities.

“That’s why we have set out this range of measures that would help to stem that tide, by putting much-needed cash into the pockets of families who are struggling to stay afloat. We urge all political parties to commit to the action we’ve set out, and to use the next Scottish Parliament to loosen the grip of poverty on the lives of Scotland’s children.”

Anna Ritchie Allan (Executive Director, Close the Gap), said: ““The existing inequalities women face in the labour market means they’ve been hardest hit by COVID-19 job disruption.

“The pandemic has starkly illuminated the link between women’s in-work poverty and child poverty. Women who were already struggling are now under enormous financial pressure as they and their families are pushed into further and deeper poverty.

“The End Child Poverty Coalition manifesto calls on Scotland’s political parties to commit to bold action to reduce child poverty. Close the Gap welcomes the focus on substantive action to address women’s inequality in the labour market including tackling women’s low pay and boosting the provision of funded childcare.

“Ensuring economic recovery policymaking prioritises measures to build a labour market that works for women is a necessary step in tackling the growing child poverty crisis.”

The manifesto – along with a summary version – can be found here.