Britain’s gender and race pensions gap exposed

1st March 2016


Women have barely half the pension savings of men, while black and minority ethnic groups have significantly less than their white counterparts, new research reveals.

The study, carried out by the Pensions Policy Institute and sponsored by the TUC, shows that women have, on average, £7,500 in savings in defined contribution schemes, compared to £14,500 for men.
And women typically have £32,000 in pension savings in defined benefit schemes, whereas men have £62,900.
The report, The Under-pensioned 2016, reveals large pension disadvantages for women, ethnic minority workers, carers and the self-employed.
The findings show:

Women – As well as having barely half the pension savings of men, women also receive a far smaller state pension. Women receive 13% (£1,092) a year less than the average state pension and 25% (£2,548) a year less than men get from their state pensions.

Carers – Carers typically have just £5,800 in savings in defined contribution schemes – 44.8% below average. And carers have only £6,000 amassed in defined benefit schemes – a massive 86.2% below average.

Black and minority ethnicity workers – An Indian worker typically has less than half (£22,100) the defined benefit pension savings of a white worker (£45,500). Black pensioners receive 16% (£1,404) less than the average for all pensioners and 20% (£1,820) less than white pensioners in State Pension.

Self-employed – Self-employed workers typically have 4.8% less in defined contribution savings and 12.7% in defined benefit savings than average pensioners.

The Under-pensioned 2016 report says reasons for the disparities include workplace discrimination, job segregation and the lack of flexible working.
The report warns that despite recent changes to state and workplace pensions, these stark divisions will remain unless the government takes further action. It states that workers from underpensioned groups are less likely to be eligible for auto-enrolment into workplace pensions than the wider population, typically because their wages are too low.
It explores the potential impact on underpensioned individuals of lowering the £10,000 earnings trigger for auto-enrolment, increasing contribution rates and dropping the system of banding that restricts the income on which pension contributions are based.
The TUC believes that these are key policies that the government should consider when it comes to review auto-enrolment in 2017.

The Pensions Policy Institute will launch the report officially at the TUC’s Congress House headquarters at 3pm today. Speakers will include Shadow Pensions Minister Angela Rayner.

TUC general secretary Frances O’Grady said: “Today’s report is a sobering reminder of Britain’s stark pension divide.

“Everyone should have the chance of a decent retirement income, not just men in full-time employment.
“Women, carers and ethnic minority workers will continue to have a tough time in old age if swift action is not taken.
“We urgently need a debate on how unions, government and employers can work together to can build on the success of auto-enrolment.
“And we mustn’t shy away from looking at the underlying problems in our labour market that are driving these inequalities in pension saving.”
Head of policy research at the PPI, Daniela Silcock adds: “Though pensions policy has played a role in supporting adequacy, the underlying causes of retirement income disparities cannot be tackled solely through pensions policy.

“They involve labour-market, social and regulatory issues related to inequalities experienced during working-life. Therefore, addressing ongoing differences in private pension income would involve a joint effort from government departments, employers, social services, regulatory bodies and community support groups.”

3 thoughts on “Britain’s gender and race pensions gap exposed”

  1. Jive Bunny says:

    “….addressing ongoing differences in private pension income…” – Why only private pensions? Exactly the same problems exist in the Public Sector Pension arena!

    1. des says:

      Totally disagree, at least in the public sector you were, and I believe still are offered a pension as part of your T&C package. Depending on your grade depended what you got. Nevertheless you still had a pension.

      Private pensions are a different animal, people rather would rather have money in their pocket and not save for a rainy day. Bearing in mind most of these people are on low paid jobs.

      1. Jive Bunny says:

        The piece is about, amongst other things, auto enrolment which now forms part of your terms and conditions of employment, so your employer has to offer you a pension whether he likes it or not (assuming his staging point has been reached). “Private Pension” as referred to in this article is any Pension provided outwith the Public Sector.

        If your argument is that Public Sector Pensions are non-contributory then you are flat wrong. The DWP workers pay a sliding scale of between 3% (for staff on ZERO – £15000.00 pa) – 8.05% (for staff on £150000.00 pa +) with differing amounts within scale ranges –

        These amounts are due to increase to 3.8% fairly soon at the lower bound and take no account of the 1.5% already paid regardless of pay level in respect of widows and dependants. That’s 5.3% of your salary even if you’re a part timer earning say £7500.00 pa. You have no choice in this as the “terms and Conditions” which you sign up under make these payments compulsory, not voluntary. This contrasts with the Private Sector where, if you have been caught under auto enrolment you have the choice to opt out if you need the money as many will on low pay, just as those Public Sector workers on low pay will need the money but are told they will pay the contributions which are taken out of their salary at source before it is paid into their bank account.

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