The Purse

Gender pension gap: women to take home half of weekly income by 2045 (compared to men). And listen to the podcast with Jana Hlistova

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Gender pension gap: women to take home half of weekly income by 2045 (compared to men). And listen to the podcast with Jana Hlistova

Jana Hlistova

Sep 03, 2023

Welcome to our #201 weekly newsletter.

“For women taking control of their financial future”

-Jana Hlistova

From The Purse

In this week’s newsletter, we cover the gender pension gap and a recent report which forecasts that women’s weekly income will be half of their male peers, by 2045.

The gender pension gap in private pensions is currently estimated at 35%, according to the Department of Work and Pensions.

It’s never been more critical for women to engage and take ownership of their financial future.

And The Purse Podcast is celebrating 100 episodes since launch!

Thank you to all of my listeners and for being on this journey with me. To celebrate, I decided to record an audio journal so I could share my journey with you and to talk about what led me to founding the The Purse and The Purse Podcast. Please enjoy!

Listen to the podcast here.

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And you can review the news in brief so you stay on top of global financial, economic and investing trends.

I hope you enjoy this week’s newsletter.

Until next week,

Jana

Gender pension gap: women to take home half of weekly income by 2045 (compared to men)

A report forecasts that the gender pension gap will remain at 35%+ for 20 years.

According to a report, women’s workplace pensions are forecast to narrow only slightly to men’s in the next 20 years, as per The Financial Times.

And whilst an improvement is expected in women’s state pensions, Lane Clarke & Peacock has projected that women will take home a weekly income of half the size of their male peers by 2045 due to the shortfall in private pensions.

The gender pension gap in private pensions is currently estimated at 35%, according to the Department of Work and Pensions.

As we know, this can be largely attributed to:

the gender pay gap
women have less disposable income to save and invest
women interrupting their career to start a family
rejoining the workplace on a part-time basis or on a reduced full-time salary
(later) shouldering elderly care
and many leaving the workforce early.

Many women leave the workplace in their 50s because of the menopause. Ironically, this is often at the peak of their career when, in theory, women should be maximising pension contributions.

For this reason, many women are at risk of losing out to a comfortable retirement. And in some cases, without the necessary support, they may fall into poverty.

The data shows that older women who might be widowed or unattached, perhaps have been a single parent, have higher poverty rates than men.

Not only do women form three-quarters of those excluded from automatic enrolment because they earn below £10,000 per year, but when a marriage breaks down, women do not usually receive a percentage of their partners’ pensions.

Although it depends on how a divorce is negotiated, private pensions are often ‘forgotten’ by lawyers, and many do not properly evaluate the size of a pension pot.

According to Office for National Statistics, pensions are often the biggest marital asset after property, making up 42% of household wealth.

Research published by the Institute for Fiscal Studies, has said more support was needed for women on maternity leave, including measures to boost child benefits to support parents. Much of the pension difference still hinges on issues in the labour market.

However, whilst childcare affordability is an issue in the UK, so is the low take up by fathers of shared parental leave. This was estimated at only 2-8% in 2019.

Societal and gender norms continue to influence who takes up the majority of childcare, which affects women’s financial health in the long-term.

It’s never been more critical for women to engage and take ownership of their financial future.

What next? (Re) read these articles on The Purse:

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