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The Trades Union Congress (TUC) has reported that women are at a higher risk of missing out on auto-enrollment to workplace pensions, with over 10% of women in jobs where their employers are not obligated to provide them with a workplace pension, compared to under 5% of men. Additionally, over 1.4 million women earn less than the £10,000 threshold required by law to be automatically enrolled in a pension scheme. The areas with the highest proportion of female employees who do not qualify for auto-enrollment are Northern Ireland, the West Midlands, and Wales.
The unequal division of caring responsibilities is one of the key factors resulting in women missing out on workplace pensions. Women often have to take time off work or work part-time to care for children, making it harder for them to build up a pension. Other factors include the gender pay gap and historical differences in national insurance contributions, leading to average lower state pensions for women.
The income gap between men and women in retirement is now 40.5%, which is more than twice the gender pay gap, according to the Prospect Union. The TUC has called for improvements to pension auto-enrollment, such as removing the £10,000 earnings threshold so that all workers are automatically enrolled in a workplace pension, scrapping the lower earnings limit to calculate contributions, and increasing statutory minimum employer contributions from 3%.
The Department of Work and Pensions has acknowledged that auto-enrollment has increased the number of women saving for retirement and that they support proposals to expand automatic enrollment to benefit groups that have found it harder to save for retirement, including women.