In a recent study carried out by Zurich Insurance, it has been revealed that women are receiving almost £50,000 less into their pensions compared to men.
The survey looked into 250,000 pension plans and is one of the largest workplace studies undertaken. It revealed yet again the disparities between men and women in the workplace. Reasons for such differences have been put down to men being less likely to take career breaks to raise a family and their tendency to work in sectors with more established pension schemes. The survey also reported that in the last year, compared to women, men under the age of 35 had £217 more in their pension pot.
The difference in the gender pay gap has had a significant effect on the total pension contribution, with men receiving 7.8% of their salary compared to women who only obtain 7%. Over time this leads to the significant difference between men and women’s pension income – giving the reported value of £47,000 as the difference that employers are paying.
Rose St Louis, commissioner of the survey from Zurich Insurance said “The impact of the gender pay gap on women’s pension pots is no secret, but this difference in the contributions that they receive from their employer presents a serious – and growing – problem”.
It is evident here that in order to reduce the pension contribution imbalance, equality in pay between men and women must be equalised and employers must pay the same proportions into pension schemes.
For many students, pensions seem like a lifetime away, but as soon-to-be graduates with long careers ahead of us, it is important to understand how pensions work and why setting up an effective scheme will provide great benefits in the long run. As a society that continues to live longer, no doubt the age of retirement will continue to increase as the Government can’t afford to pay out state pensions for this added time. Even though some people decide to retire before the state retirement age, they are still unable to access a state pension until this time. As a result, the importance of saving from a young age has been recommended by pension experts, and if we want to re-live the frivolous student life once again in our old age, we better start saving soon.
By Jess Jones
Photo from: (Money/How stuff works)