Women pensioners are more likely than men to miss out on pensions auto-enrollment

• Aparna Sreevalsan
• 31 May, 2023

THE TRADES Union Congress (TUC) has called on the government to take immediate action to address pension inequities after finding that women are more than twice as likely as men to lose out on pension auto-enrollment.

According to the study, over 10.9 per cent of women work in positions where their employers are not required to enroll them in a workplace pension, compared to 4.3 per cent of men.

Regional disparities were also highlighted, with the union discovering that Northern Ireland (15.2 per cent), the West Midlands (14.5 per cent), and Wales (14.2 per cent) had the largest number of female employees who do not qualify for auto-enrollment. London had the lowest rate (seven per cent).

According to Prospect Union*, the income disparity between men and women in retirement is already 40.5 per cent, more than double the level of the gender pay gap (now 14.9 per cent).

Because of the significant pension income disparity between men and women, the average retired woman passes nearly five months of the year without receiving a pension.

Reflecting on the data, the TUC noted that, while businesses are supposed to automatically enroll any workers earning £10,000 or more in a pension, about 1.4 million women earn less than this level, leaving many without an occupational pension.

The study revealed that more than one-third (36 per cent) of younger women and 15 per cent of younger males aged 18-21 do not earn enough to need their employers to auto-enroll them.

The TUC says the primary causes of the gender pension income disparity are:

• Caring responsibilities of women.
• The gender pay gap caused by the caring responsibilities.
• Gaps in pensions auto-enrollment means employers do not have to enroll low-paid workers into a workplace pension – and these are more likely to be women.
• Historic differences in National Insurance have left women with lower state pensions on average.

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.

“Ministers should start by scrapping the earnings threshold for auto-enrollment. Workers should have the chance to build up a pension, regardless of how much they earn.”

Furthermore, it urged the government to establish a timeframe for increasing statutory minimum employer payments from three to five per cent so that all workers would benefit from adequate contributions.

 

*Prospect Trade Union is a United Kingdom trade union that represents engineers, managers, scientists, and other specialists in both the public and private sectors.