The Women's Budget Group has welcomed the findings of the Pensions Commission's Interim Report, saying it provides important recognition of the structural inequalities that continue to leave many women, carers and low-income workers with significantly lower retirement incomes.
Responding to the report's publication, the Women's Budget Group (WBG) said the Commission was right to acknowledge that pension inequality is closely linked to wider inequalities in the labour market and care system, rather than being an issue that emerges only at retirement.
The organisation argued that while automatic enrolment has successfully increased pension participation across the workforce, it has not gone far enough to ensure adequate retirement incomes for many workers, particularly women and those on lower or middle incomes.
According to the WBG, women continue to face a range of barriers to building pension wealth throughout their working lives. These include lower average earnings, a greater likelihood of working part-time, time spent out of the workforce due to caring responsibilities, and reduced opportunities to contribute consistently to pension schemes.
The think tank highlighted one of the report's key findings: that women in their late 50s hold, on average, almost half the private pension wealth of men of the same age.
In a statement, the organisation said:
“Women, carers and low earners continue to face structural barriers within the pensions system, whether or not they have children.”
Women's Budget Group
The group argued that the gap in retirement incomes is a consequence of longstanding economic inequalities rather than individual choices.
“Women's lower pension wealth is not accidental but a reflection of structural inequalities in the labour market including lower pay and unequal caring responsibilities which limit access to consistent pension saving across the life course.”
Women's Budget Group
The WBG also stressed the importance of the State Pension, noting that many women rely more heavily on it as their primary source of income in retirement because of lower levels of private pension savings.
As a result, the organisation said the Commission should carefully consider both the adequacy of the State Pension and the impact that any future reforms to workplace and private pensions could have on women's retirement incomes.
The report's recognition of the challenges faced by unpaid carers and others who are excluded from pension saving was also welcomed by the organisation, which described it as an important step towards addressing long-standing inequalities within the system.
However, the Women's Budget Group warned that tackling the gender pension gap would require more than incremental reform. It called on the Commission to consider more ambitious changes as it develops its final recommendations.
The intervention adds to a growing debate about retirement incomes, pension adequacy and the economic impact of caring responsibilities as policymakers examine how the pensions system can better support an ageing population.
The Women's Budget Group is a leading feminist economics think tank that works on issues relating to women's economic equality, public policy and labour market participation. It has previously submitted evidence to parliamentary inquiries examining pension inequality and retirement outcomes.
The Pensions Commission is expected to continue its work before publishing further recommendations on how the UK pensions system can provide greater financial security for future retirees.
