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Insuring Everyone’s Futures


Recently, I was struck by the assertion from the Minister for Women that she was in fact the “Minister for Half the Population” when she presented at the recent launch of the Government Equalities Office (GEO) Gender Equality Roadmap. This roadmap was a welcome report, clearly identifying how this ‘half’ of the population on average earns less throughout their lives, which unsurprisingly translates to an even larger financial gap at retirement.

As a society, this should cause us some disquiet. By 2037, one in four of the population will be over 65[1], and as 36%[2] of women say the State Pension will be their main source of income in retirement, it should be disquieting for Government as well.

It is not just the GEO who have released vital reports on this topic. There is now a wealth of available analysis out there which we can draw on, not least the work of the Insuring Women’s Futures (IWF) project. This project has analysed the risks faced by women throughout the life course. One of their identified risks is the gender pensions deficit, which is why Yvonne Braun and I have been heavily involved in the project over the last few months.

This work, I believe, is essential. The statistics alone illustrate this: the IWF project found that the average 65-year-old woman had an eyewatering 1/5th of the pot size of her male equivalent. Later this year the project will be providing its key recommendations for mitigating these risks. However, the analysis has demonstrated two things:

  1. Women are great savers. Women aged 16-29 have saved more into their pension than men, despite on average earning less[3], and working women in their 30s are more likely to participate in a workplace pension[4];
  2. The “motherhood penalty” continues to bite. Private pension savings start to decline once women have children, and in most cases never recover.

It’s not just taking time out to have a baby; it is the consequential trajectory. Childcare is astonishingly costly[5], so women tend to go part-time, which impacts their promotion opportunities[6] and then later in life they often take on further caring responsibilities for elderly relatives[7]. As a result of these structural hurdles, the Pensions Policy Institute found that 50% more women than men are heading towards retirement without any private pension savings.

Lower private savings contribute to a double whammy because of longer life expectancy: even if the value of retirement pots were equal between the sexes, a woman’s pot would actually have to work harder in order to provide an income for longer (on average 3.7 years longer) than her male counterparts.

We know savings are a problem, but does it look better at retirement? Well, not really.

We do not know how many women are dependent on a male partner’s pension. However, 70% of guaranteed income products bought are single life and while the purchaser gender split is unclear, given that we know household pension assets tend to primarily be the male partner’s, one could assume that they are the main purchasers.

Drawdown is also concerning: the recommended sustainable drawdown rate is 3.5%, but in the year to March 2018 c74% of withdrawals exceeded that (ABI). Smaller pots and longer lives mean women will have to be more prudent with their drawdown rates; however, Zurich found that women were twice as likely to never check the performance of their pension portfolio in drawdown. Clearly, there is also a gender engagement issue.

So, what can we do?

  • Firstly, we need gender disaggregated data and better data about households’ financial circumstances. Here at the ABI we practice evidence-based policy, but we need the evidence to help determine that policy.
  • The new Money and Pensions Service is perfectly positioned to effect change. Having women and their finances as an objective of their forthcoming National Strategy would be one great step for womankind.
  • We need to think macro. Affordable childcare, flexible and transparent working policies, equal paid parental leave, recognising the economic contribution of carers – just one of these would help bridge this gap.

Solving the gender pensions gap seems an Everest of a task, but hey – nothing worth having comes easy…



[1] ONS 

[2] Insuring Women’s Futures: Risks, exposure and resilience to risk in Britain today

[3] ONS

[4] Pensions Policy Institute: Understanding the Gender Pensions Gap

[5] The People’s Pension: The Gender Pensions Gap Tackling the motherhood penalty

[6] The ABI: Tackling the gender seniority gap

[7] Insuring Women’s Futures: Securing the financial future of the next generation

Last updated 18/07/2019