UK women ‘twice as likely to miss out on pensions auto-enrolment’

Women are more than twice as likely as men to miss out on being automatically put into a workplace pension, according to a report.

The Trades Union Congress (TUC) said its study suggested that more than one in 10 women were in jobs where their employers did not have to enter them into a workplace pension, compared with fewer than one in 20 men.

About 1.4 million women earn less than the £10,000 threshold that requires their employers automatically to enrol them into a pension, said the TUC. This means they are potentially missing out on an occupational pension.

Northern Ireland, the West Midlands and Wales are the areas with the highest proportion of female employees who do not qualify for auto-enrolment, according to the study.

The Prospect union has calculated that the income gap between men and women in retirement is now 40.5%, more than twice the level of the gender pay gap.

Paul Nowak, the TUC’s general secretary, said: “We need to fix our pension system so that all women can benefit from a decent income in retirement. But many are missing out on having any sort of occupational pension at all. Unless ministers act now, more women will be consigned to poverty in retirement.

“Ministers should start by scrapping the earnings threshold for auto-enrolment. Workers should have the chance to build up a pension, regardless of how much they earn.”

One driver of the gender pensions income gap is the unequal division of caring responsibilities, the TUC said, which means women are much more likely to take time out of work or work part-time to look after children. That makes it harder to build up a workplace pension.

Other causes include the gender pay gap, and historical differences in national insurance that have left women with lower state pensions on average, the TUC said.

Nowak said: “We need to invest more in childcare and social care, and in the women workers who overwhelmingly work in these professions. That’s a key way to close the gender pay gap. We need to fix our pension system so that all women can benefit from a decent income in retirement.”

The TUC wants the government to introduce a statutory requirement for ministers to report on the gender pension gap, along with an action plan on how to tackle the gap.

It also wants pension auto-enrolment to be improved, so that it works for people in low-paid or part-time jobs. That could be done by removing the £10,000 earnings threshold so that employers must opt all workers into a workplace pension, scrapping the lower earnings limit so that contributions are calculated from the first pound of earnings, and setting out a timetable to increase statutory minimum employer contributions from 3%, the TUC suggested.

A Department of Work and Pensions spokesperson said: “Automatic enrolment has transformed pension saving and boosted the number of women saving for retirement, with participation rates catching up with those of men.

“When AE was introduced, just 59% of eligible women across the entire economy saved into a workplace pension. By 2021, this had risen to 89%.”

“We recently confirmed support for proposals to expand automatic enrolment even further, enabling millions to save more, earlier. These changes will particularly benefit groups, including women, who have historically found it harder to save for retirement.”