On National Single Parent Day, master trust Now Pensions calls for affordable childcare and auto-enrolment reform to help eliminate the motherhood penalty. Single mothers have lost out on more than £852m in pensions contributions for being ineligible for auto-enrolment since 2012, the Pensions Policy Institute has calculated. 

The PPI, together with master trust Now Pensions, found not only that single mothers earn 53% less than the average man and 37% less than the average woman, but that being ineligible for auto-enrolment as low earners means they have missed out on more than three-quarters of a billion pounds in savings since 2012.  

One in three working single mothers is ineligible for a workplace pension under current auto-enrolment rules, despite 59% being in employment, meaning they do not receive employer contributions or tax relief.  

Given their childcare responsibility, most single mothers are in part-time jobs, with 54% working part-time compared with a UK average of 21%. This substantially contributes to single mothers not meeting the £10,000 earnings trigger from a single job.   

Lizzy Holliday, director of policy and public affairs at Now said that for too many, saving an adequate amount in a pension remains out of reach.     

“Data shows the current system has a disproportionate impact on working single mothers – and they are missing out on the critical support and contributions that other workers benefit from,” she said.  

Holliday called for a better childcare offer to support parents who want to work or work more but cannot afford to.  

“Affordable and available childcare is a key enabler to support more mothers and families in their choices about their careers and working lives. We welcomed the continued delivery of measures on childcare and announcements at the Spring Budget on child benefit – but we are keen to see the practical and delivery challenges for childcare provision addressed.”  

The government’s expansion of free childcare has come under heavy criticism from early years providers who say they do not know how much they will receive from government and if they will be able to afford to provide the care, while parents faced delays in getting the codes from government to give to childcarers. Last week, the government launched a consultation on recruiting and retaining childminders.  

Holliday said the scale of the gender pensions gap requires bold policy actions – such as setting out a roadmap for the future of auto-enrolment, including addressing the adequacy question which affects women disproportionately. 

Now is also calling for abolishing the £10,000 earnings trigger, removing the lower earnings threshold, introducing a carer's top-up, considering pensions on divorce, and affordable childcare.

Inequalities in the labour market, taking time out of employment, as well as employers not investing in the careers of those with caring responsibilities can have a serious impact on the later life outcomes of those raising children on their own, said John Adams, a senior policy analyst at the PPI.  

“While there are some pensions policy options that could be introduced to help single parents save for their retirement, it’s unlikely to significantly improve their outcomes without changes in labour market conditions and better access to affordable childcare,” Adams argued.  

The findings confirm those in the latest ‘Women & Retirement Report’ by Scottish Widows, which warned that three-quarters of the UK’s circa 2.5m single mothers might not be able to afford food and heating when they retire.   

The provider also called for childcare reforms, as well as the introduction of a ‘family pension’. 

Figures published by the Department for Work and Pensions on Thursday show children are bearing the brunt of a rise in poverty, as the largest increase in low-income measures was seen for children. Nearly a third (30%) of children in the UK live in relative poverty and a quarter live in absolute poverty, after housing costs.

   

   

How could you observe National Single Parent Day?

nationaldaycalendar.com recommends: