Women are more than twice as likely as men to lose out on auto-enrolment, new research to mark gender pensions gap day today (29 May) has revealed.
Analysis by the Trades Union Congress (TUC) found that more than one in 10 female workers (10.9%) are in roles that do not require their employer to automatically enrol them in a pension scheme, compared to just 4.3% of men.
The data – released on the day the average female starts receiving their pension if it was paid at the same rate as for an average male – showed the average pensions gap between the genders is 40.5%, which equates to £7,100.
While employers are legally obliged to auto-enrol staff earning £10,000 or more annually into a pension and contribute to the scheme, 1.4 million women do not qualify since they earn less than that amount.
The areas which had the highest number of women who didn’t qualify for auto-enrolment were Northern Ireland (15.2%), the West Midlands (14.5%) and Wales (14.2%), with London having the lowest (7%).
TUC general secretary Paul Nowak said: “We need to fix our pension system so that all women can benefit from a decent income in retirement, but many are missing out on having any sort of occupational pension at all. Unless ministers act now, more women will be consigned to poverty in retirement.”
According to the research, younger workers are also missing out because while the government plans to lower the age threshold for auto-enrolment from 22 to 18, the number of young people in low-paid and part-time roles will limit its effect.
The figures highlighted that among younger workers aged 18-21, 36% of females and 15% of males do not earn enough to be auto-enrolled into a workplace pension.
The TUC believes the main reasons for the gender pensions gap include caring responsibilities falling mostly to women, the impact of the gender pay gap, gaps in auto-enrolment and the difference in state pension payments between the genders. According to the union body, unless these disparities are tackled, the gender pension gap will continue when today’s workforce reaches retirement.
Nowak added: “Women taking on caring responsibilities are a key driver of the gender pensions gap and the gender pay gap. We need to invest more in childcare and social care, and in the women workers who overwhelmingly work in these professions. That’s a key way to close the gender pay gap.
“Ministers should start by scrapping the earnings threshold for auto-enrolment. Workers should have the chance to build up a pension, regardless of how much they earn.”
The TUC wants the government to take better measures to address the gender pay gap, such as introducing mandatory action plans and a statutory requirement for ministers to report on the gender pension gap, making auto-enrolment work for low-paid or part-time employees, introducing funded, high-quality childcare for all, and fixing the staffing problems in social care and childcare.