Women retiring today are losing out on an average of £7,600 per year due to a persistent gender pension gap, new research has revealed. According to the TUC, this shortfall is the result of longstanding inequalities, which are amplified by factors such as the gender pay gap and women’s disproportionate share of caregiving responsibilities.
The study, conducted in partnership with the Prospect union, paints a stark picture of the financial disadvantage faced by retired women compared to their male counterparts. Despite gradual improvements, the gender pension gap remains significant, leaving women at a financial disadvantage in retirement.
Gender Pension Gap Continues to Impact Women in Retirement
The latest findings from the TUC show that retired women effectively stop receiving pension income four months earlier than men each year, which translates into an annual loss of £7,600 on average. This gap is a result of several factors, primarily the gender pay gap, which remains a substantial issue. Women earn 13.1% less per hour than men on average, with this disparity growing to 18.9% for women in their 50s. These pay discrepancies mean women contribute less to their pensions over their lifetimes, ultimately leading to lower retirement incomes.
Further compounding this issue, women are more likely to take career breaks or work part-time due to caregiving duties, leaving them with fewer years of pension contributions. The TUC highlights that while women are increasingly saving for retirement, they still face significant barriers that prevent them from achieving the same pension security as men.
The gender pension gap has improved somewhat in recent years. The gap has narrowed from 44.9% in 2011-12 to 36.5% in 2022-23, driven by higher female employment rates, reduced pay inequality, and improvements in the state pension system. However, progress remains slow, and the gap remains far from closed.
Unions Push for Stronger Action to Close the Gap
In response to these findings, unions and experts are calling for greater action to address the gender pension gap. The TUC has emphasised the need to revive the Pensions Commission, a body that would bring together unions, employers, and independent experts to develop solutions for closing this disparity. TUC General Secretary Paul Nowak stressed that “everyone deserves dignity and security in retirement,” and highlighted the importance of tackling these inequalities for future generations.
The government has acknowledged the issue, with a spokesperson stating that efforts to close the gender pension gap are already underway. They pointed to the new state pension, which aims to address historic inequalities faced by women and low earners. However, critics argue that more needs to be done, particularly in the private pension sector, to ensure women can retire with the same financial security as men.
