Millenial men will be £50k richer than women by the age of 63

Employment & Skills | Latest News | National

Gender pay gapThere is a ‘gap’ between the amount that men and women receive in employer pensions contributions, which if left unaddressed could result in a shortfall of £47,000 by the end of a woman’s working life, according to the inaugural Zurich Workplace Savings Barometer.

Last year, on average, men under the age of 35 received £217 more in employer pension contributions than females of the same age.

Furthermore, between 2013 and 2016, men have benefitted from pension contributions of 7.8% of salary each year from their employers compared with 7.0% for women.

This difference comes on top of the gender pay gap and meant that the value of the employer pension contribution was £3,495 for men and £2,489 for women – a difference of over £1,000 over the four year period.

With wage growth taken into account, this difference could amount to a shortfall for women of £46,689 by the end of a working life.

The analysis of over 250,000 pension plans, breaking down by age, gender, employee and member contributions alongside income, is one of the largest ever studies of workplace savings.

The findings lift the lid on three factors contributing to the shortfall in women’s pension pots: the gender pay gap leads to a lower value of employer contribution as a percentage of salary, women are still more likely to take career breaks to raise a family, and men typically work in sectors with more established, or more generous pension schemes.

Rose St Louis of Zurich Insurance, comments: “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.

“The ‘triple effect’ of smaller salaries, career breaks for women and lower contribution rates needs to be addressed: we can’t ignore a £47,000 shortfall.

“Workplace engagement and guidance has a central role to play in helping women make the most of their saving potential while they are working full time, but it is now crucial that greater focus is placed on ensuring that this gap is not allowed to grow any further.”

 

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