The pandemic has increased the gender pensions gap to almost £200,000, according to a new study.
Research carried out by the Centre for Economics and Business Research, found women are missing out on £183,936 compared to the amount men receive from their pension. This is despite the fact women give a bigger proportion of income to their pensions, the report said.
The current gender pension gap of £183,936 is a stark rise from last year, when there was a pension gulf of £157,263. Commentators believe it is clear that the Covid-19 pandemic has caused significant disruption to many people’s retirement savings, but the impact has been most acutely felt among older women.
As we begin to think about what a post-Covid society looks like, it is vital that the industry and government does more to encourage women to engage with long-term financial planning. The fact women have less comfortable and financially secure retirements than men shows the need to tackle the root causes of the financial disparity between men and women throughout life.
Researchers warned the gender pension gulf is likely to have increased due to the coronavirus crisis causing the value of pension pots to decrease as well as preventing people who are over-55 from saving money to contribute to their retirement fund. Some 30% of women polled for the study said their financial situation had worsened since the start of the pandemic, which has impeded their capacity to save money for their pension pot. A quarter of men said the public health crisis has impacted their pension savings.
Researchers said the growing gender pension gap could be caused by the fact women are bearing the brunt of the economic fallout sparked by the coronavirus crisis. Studies have found that women have been more likely to lose jobs or be furloughed due to being over-represented in low-paid, precarious jobs and sectors hit hardest by the pandemic, such as hospitality, retail, leisure, tourism and the arts. The latest study, which analysed the average earnings of both men and women last year, found men are able to contribute £3,184 to their pension fund, while women can contribute £2,340. This leads to the average woman having to work an extra 14.5 years to catch up with their male counterparts, researchers said. Men who have worked full-time for 30-34 years get an average annual retirement income of £22,776, whereas women who have worked the equivalent amount get £17,004.
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