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Further evidence of a ‘Motherhood Penalty’ hitting women’s pension savings has been revealed in new research by The People’s Pension, which shows that women’s earnings are twice as likely to be affected after having children than men’s, which can have a lasting impact on their pension savings.
The poll of more than 2,400 people across the UK, conducted by YouGov, found that since having their child(ren):
• Four-in-ten women (43 per cent) reduced their working hours compared to less than one in 10 (nine per cent) men.
• A third of women (31 per cent) stopped working for a period compared with just 4 per cent of men.
• Only a quarter of women (24 per cent) said that their pay hasn’t been adversely affected compared to almost two thirds of men (63 per cent).
With one in five women (20 per cent) stopping or decreasing their pension savings, and only four per cent of women increasing their pension contributions, it appears unrealistic to expect women who are experiencing a significant drop in their household income while they care to, at the same time, pay more into their pension.
The People’s Pension is calling on the next Government to accept the principle that caring is an economic activity which should attract workplace pension contributions and address the crippling costs of childcare through better funding.
Commenting, Gregg McClymont, the director of policy at The People’s Pension, said:
“It’s clear that women’s working lives, much more than men’s, are dramatically affected after having children, causing a knock-on effect on their current and future finances.
“Voluntary additional pensions provision is unrealistic for most women at a time when household finances are especially stretched. But without those pension contributions many women’s pension pots fall behind men’s and never recover the lost ground. That’s why we’re calling on the next government to accept that raising a family is an economic activity that deserves workplace pension contributions and to address the cripplingly high costs of childcare in the UK.”
The survey also found that the majority of workers are ill-prepared for retirement, as nearly two thirds of people (64 per cent) don’t think they’re saving enough.
To afford life in retirement, six in 10 people (61 per cent) intend to rely on a private or workplace pension; a third of people will carry on working part-time (33 per cent) or use their savings (35 per cent); two in 10 people (21 per cent) are reliant on their partner’s pension while others are depending on inheritance (18 per cent), downsizing their home (17 per cent), or winning the lottery (five per cent).
Gregg McClymont added:
“While automatic enrolment has got off to a great start it’s clear that millions of people still aren’t saving what they need to. We’re calling on the next Government to build on the success by helping workers to save more and ensure that millions of people aren’t unnecessarily excluded from auto-enrolment.”
Notes to editor:
1. The People’s Pension is a leading, not-for-profit, multi-employer pension scheme, with more than 4.7 million members from 90,000 employers and more than £8bn assets under management.
2. All figures, unless otherwise stated, are from YouGov Plc. Total sample size was 2,439 workers, of which 1,353 were parents. Fieldwork was undertaken between 8th – 12th November 2019. The survey was carried out online. The figures have been weighted and are representative of all UK workers (aged 18+).
3. For the full details of The People’s Pension manifesto please click here: https://thepeoplespension.co.uk/wp-content/uploads/2019/11/General-election-manifesto.pdf
4. All figures, unless otherwise stated, are from YouGov Plc. Total sample size was 2439 workers. Fieldwork was undertaken between 8th – 12th November 2019. The survey was carried out online. The figures have been weighted and are representative of all UK workers (aged 18+).