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Women face much lower incomes in retirement

From this week, women in the UK will begin to qualify for their state pension at 65, the same age as men.

It will now increase for both men and women, reaching 66 by October 2020 and 67 by 2028.

However, equality is a long way off when it comes to retirement income, with new research by trade union Prospect revealing that women face a gender pension gap of almost 40%.

Prospect analysed responses to the 2016-17 Department for Work and Pensions family resources survey. Taking into account all sources of retirement income, including state, personal and workplace pensions, this showed that pension income for female retirees in that year was 39.5% lower than for men -- equating to an average shortfall of around £7,000.

This is twice the level of the gender pay gap, which was 18.4% in 2017.

The gender pay gap is one factor, as it feeds through to lower pension income. On top of this, women take on a disproportionate share of caring for children and other relatives and this leads to gaps in their pension contributions.

"Gender-based economic inequality may start in the workplace, but it follows women for the rest of their lives," commented Prospect's senior deputy general secretary Sue Ferns.

"It is not acceptable that women are condemned to less comfortable retirements and greater anxiety about finances because of inherent unfairness in the labour market and structural problems in the pension system."

The report makes a series of recommendations to the government, including positive recognition of caring responsibilities in the state pension system, credits for people who opt out of receiving child benefit, and abolition of the automatic enrolment earnings trigger which disproportionately excludes women from workplace pension schemes.

In addition, the union called for the government to produce an annual report on the size of the gender pension gap.

"This will focus attention on the problem and help build a consensus for action to tackle it," Ferns explained.

Posted on November 8th 2018

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