FOR IMMEDIATE RELEASE 3 April 2018
Analysis conducted by NOW: Pensions has revealed that women aged 25 will accumulate a workplace pension that is 20% less than men by the age of 65 based on auto enrolment minimum contributions. If they take a five-year career break, they will accumulate a pot which is 33% smaller than male counterparts.
Currently 25-year-old women have, on average, £197.05 saved with NOW: Pensions versus £213.85 for men of the same age.
In 40 years’ time, following auto enrolment minimum contributions and taking into account mean salaries for men and women over their working lives, these funds will have grown to £50,514 for men and £40,332 for women.*
If a 5-year career break is applied**, this figure falls to £33,986.02 for women – 33% less than men.
Commenting on the analysis, Amy Mankelow Director of Communications at NOW: Pensions said: “Not only are women losing out during their working lives but they also face a poorer retirement as a result of the persistent gender pay gap.
“Auto enrolment does little to address this inequality as millions of women are excluded from saving altogether as they earn less than the £10,000 auto enrolment trigger. This means that a large proportion of part-time workers, who are much more likely to be women, don’t have the opportunity to save in the first place.
“We want government to remove the £10,000 auto enrolment trigger to give more women the opportunity to save.”
According to a report by the Pensions Policy Institute commissioned by NOW: Pensions, over three quarters (77%) of employees earning less than the auto enrolment trigger are women. Over 50% of part-time workers earn less than the auto enrolment trigger and 81% of part-time workers are women.
The report estimates that 3 million individuals would become eligible for auto enrolment if the earnings trigger was removed.
– ENDS –
For further information:
Amy Mankelow / Cheriton Lee
Tel: 0203 948 9234 / 0203 948 9236
020 3841 9333
Notes to editors
*Assumes 3% investment growth. Mean salaries from ONS as follows:
|Age Category||Mean Income||Age Category||Mean Income|
|Under 20||15,900||Under 20||15,100|
|75 and over||25,800||75 and over||20,400|
**Career break calculations applied between the ages of 28 and 33 for illustrative purposes.
NOW: Pensions www.nowpensions.com @nowpensions
NOW: Pensions is one of the UK’s largest workplace pension providers with over a million members and tens of thousands of employers from a wide range of sectors. A company wholly owned by Danish pension scheme ATP; one of Europe’s largest pension funds. NOW: Pensions entered the UK market in 2011 with a simple and cost-effective workplace pension designed specifically with the auto enrolment market in mind.