Auto-enrolment exclusions fuel pension gender gap

Failure to engage

Auto-enrolment exemptions and low engagement are helping maintain the pension gender gap, according to Aegon.

Research from the provider found more than a third of women do not know how much they have saved in a pension - double the number of men.

It also found 13% of women have no pension arrangements at all. This compared to 8% of men. 

Aegon head of pensions Kate Smith blamed auto-enrolment criteria which exclude the lowest-paid - many of whom are women. She also said continued low engagement was a factor in the figures.

She said it was"hugely disappointing" that increased engagement had not happened despite increased coverage of the pensions gender gap.

Smith said:"Knowledge is key to helping solve the gender pension gap so it's really worrying to see that more than a third of women remain in the dark about what they have saved for retirement - if anything at all.

"We already know that women are at a disadvantage in terms of pay, childcare responsibilities and costs and reduced working hours but by not having a complete picture of their financial situation, they are putting themselves at a further disadvantage. That picture includes their pension." 

Women are being let-down by the current auto-enrolment criteria as they are more likely to be lower earners and work part-time, Smith added.

"Auto-enrolment needs to be more inclusive to include lower earners, who are disproportionately female.

"A solution needs to be found for individuals with multiple jobs, each below £10,000 allowing them to benefit automatically from an employer contribution.

"This will help to close the gender pension gap."

This article was written by Jenna Brown from Professional Advisor and was legally licensed through the NewsCred publisher network. Please direct all licensing questions to legal@newscred.com.