Falling between the cracks: PensionGeeks raise awareness of women’s retirement prospects
Pardon the Interruption
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September means the end of warm weather, the return of parliament – unless this is prevented – and the annual Pension Awareness Day to engage with the nation about the need to save for retirement.
Introduced by campaigners PensionGeeks, PAD forms the highlight of a one-week tour with their Pensions Bus, which this year is starting in Edinburgh and finishing in Peterborough on Sunday 15th September, this year’s PAD.
The campaign has the support of the Department for Work and Pensions and Pension Wise, as well the Pensions Regulator, which has tweeted its endorsement.
TPR said it supports the idea of people engaging more with their pensions, which is at the heart of Pension Awareness Day.
“This year we have provided the Pension Geeks with ScamSmart information to give to consumers to help them avoid becoming a victim of a pension scam. We have also given them leaflets containing information about re-enrolment for current employers and guides to automatic enrolment aimed specifically at new employers that are getting workplace pension duties for the first time,” said a spokesperson.
How much do people know about pensions?
Less than half of those 16 to 44 feel they understand enough about pensions to make decisions, and the percentages are declining in all age groups since July 2016, according to the Office for National Statistics.
Given this vast gap in pensions literacy, Pension Awareness Day becomes even more relevant but feels like a drop of water in the desert. And while auto-enrolment has the potential to reduce the need for time and resource-intensive education and engagement campaigns, at current contribution levels this remains a distant dream.
Individual action v structural problems
This year, the PensionGeeks have turned their attention to the gender pensions gap.
“The reality is that many people are not saving enough throughout their lives to secure a decent income for their future. This is particularly true for women, who take time out of work to care for children or other family members,” said Jonathan Bland, who started the Pension Geeks.
Trade union Prospect found earlier this year that the gender pensions gap is much wider than the circa 18% pay gap – around twice as wide, in fact. The Pensions Policy Institute also carried out research, saying that in their early 60s, the median private pension wealth of women is one third of men’s.
Its study showed that 1.2m women (in relationships) with dependent children are currently looking after their family and are missing out on auto-enrolment contributions. An additional 1.4m mothers with dependent children who are employed do not earn above the £10,000 threshold to qualify for automatic enrolment contributions.
Patrick Luthi, CEO of master trust Now Pensions which acts as partner sponsor at Pension Awareness Day, said the growth of part-time work meant many were missing out on auto-enrolment and wants to see contributions count from the first pound earned, which is not currently mandatory for employers.
"Longer term, we’d like the auto enrolment net to be widened to include still more workers, but an immediate step that many of these people could take is to ask their employer to enrol them into the pension scheme, which is something we will be discussing with people on the road this week,” said Luthi.
“Another thing we will be mentioning to people on the roadshow is our petition on the Parliament website to make changes to how tax-relief is applied to pension schemes to ensure it is consistent and fair to all members,” he added.
Reform of auto-enrolment has been pushed back by government into the mid-2020s, but even with changes to taxation and contribution thresholds, more might be needed. The PPI explores the idea of a family carer top-up, saying this could reduce the pensions gap by as much as 28%, which it says would cost between £1.2bn and £1.6bn a year, though the chances of introducing such a policy at the present time appear to be slim.
Nonetheless, the solution to the gender gap should be policy-based rather than fall on the shoulders of individuals. Pension Awareness Day does what it says on the tin – raise awareness – but ultimately, a structural problem can only be addressed by changing the rules, both legal and cultural, for example companies giving fathers enhanced paternity pay to level the playing field between female and male employees.
While speaking to women about their economic disadvantage does not necessarily help them immediately, it is nonetheless positive that the pensions industry has begun to discuss the link that exists between childcare and pensions income. And if more people – not just women – become aware of this, perhaps policymakers will eventually be forced into action.
How far can engagement and awareness go in addressing the savings and the gender pensions gap?