Are women really second-class citizens when it comes to their retirement?

4th July

Fifty years ago, the sewing machinists at Ford’s Dagenham plant famously walked out in protest at their jobs being classified as unskilled – a story that inspired the film Made in Dagenham. The ultimate result of the action, which began in June 1968, was the passing of the Equal Pay Act 1970 – legislation which prohibited the unequal treatment of male and female employees in terms of both pay and conditions.

Since then, significant gains have been made to create more equitable workplaces and recognise the value of diversity. But while the strike’s anniversary serves as a reminder of how far the UK has come, it should also underscore the disparity that still exists. A disproportionate number of women still start – and remain – in jobs with lower pay. Also, a greater proportion of women continue to take time out of their careers to bring up children or care for ageing parents, only to re-enter the workforce further down the career ladder than their male peers.1

The result is that women end up losing out when it comes to their retirement income. Lower pay and disrupted working patterns mean they typically end up with smaller workplace pensions, and some receive a reduced State Pension due to fewer years of National Insurance contributions.

A recent study by Prudential shows that women retiring this year will have incomes nearly £5,000 per year less than men, or 29% lower2; and one in six will retire with an income below the Joseph Rowntree Foundation’s minimum income standard, compared to just one in ten men3. Analysis of government data also shows that women will receive around £29,000 less than men in State Pension payments over the course of a typical retirement.4

It is even claimed that government intervention is indirectly discriminatory against women. Automatic enrolment may have been a huge success, with millions of employees now saving in a workplace pension scheme, but a greater proportion of women are excluded because of the earnings trigger. (You need to earn at least £10,000 a year in any one job to be eligible.)

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1, 23 March 2018

2, May 2018.

3 Joseph Rowntree Foundation, A Minimum Income Standard for the UK in 2017:

4 Analysis of government data by Which? April 2018

5, September 2017