In March 2020, the UK Government launched an initiative to improve pay transparency in the job application process to improve opportunities for women. Evidence has indicated in the past that listing a salary range on a job advert and not asking applicants to disclose their salary history provides women with more of an ability to negotiate pay. This pilot scheme could be a step towards closing salary gaps and tackling gender pay inequality.
Sam Dewey is the Reward & Wellbeing Manager at Macmillan Cancer Support where he has worked for over 2 years. In this post, he discusses what the gender pensions pay gap is and some of the causes of it.
What do we mean by the gender pensions pay gap?
Ultimately, it’s the difference in retirement outcomes for men and women. Unlike the gender pay gap, there is no official measure of the gender pensions pay gap. It can be roughly aligned to the same way in which you would report your Gender Pay Gap in organisations with more than 250 employees.
Most of us don’t really think about our pension outcome until it’s too late but it’s important that we educate where possible on the importance of starting and investing into a pension. Especially in the current economic uncertainty.
What are the causes of the gender pensions pay gap?
The main reason is that women are more likely than men to spend time outside the labour market or to be in part-time employment to undertake caring for family or relatives.
This effects the pensions pay gap as individuals that take time out of work for the above reasons do not usually contribute to private pensions during this time. The greater likelihood of women being in part-time employment also contributes to the pensions pay gap as their salary is lower during these periods. Whereas typically males will continue to pay into their pensions, so they spend less time out of work.
Alongside the above women tend to live longer than men so are more in need of a longer retirement income. This issue can be exacerbated during any divorce proceedings as pension outcomes are not taken into consideration in every situation.
The final reason really comes down to the design of the automatic enrolment into a workplace pension. More women tend to be excluded than men due to the earnings trigger and women earning less because of the above reasons.
How does this impact the future landscape of work?
Ultimately, if this is something that is not addressed then with each generation the gap could potentially widen. For any professional out there looking into the gender or any other characteristic pay gap, I would recommend that you look at this at the same time. Be ahead of the trend and understand the impact on your organisation.
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