A solution to help close the gender pension gap is being considered in New Zealand, while the results of a survey reveal a stark reality for women in Northern Ireland
by Bethan Rees
Northern Ireland has the largest gender pension gap in the UK, according to online pension manager PensionBee, as reported by the Belfast-based News Letter. PensionBee's analysis of data of more than 13,500 of its customers reveals a gender pension gap of 54%, with average retirement savings for men totalling £20,091 and £9,183 for women.
Reasons for the pension gap, according to PensionBee, include lower pay and taking time off work to look after children. Romi Savova, CEO of PensionBee, is quoted in the article: “I would urge women in Northern Ireland to consider how they can save more into their pensions to take advantage of the tax benefits available.” She also explains that savers could be unaware of tax top-ups that are available and could therefore be missing out on claiming more on personal pension contributions.
“Basic rate taxpayers can get a 25% tax top-up while higher and additional rate taxpayers can claim a further 20% and 25% respectively,” Savova says, adding that the responsibility should not just be on women alone and arguing that the government should have initiatives to close the gap.
News Letter article
Preparation is key
There could be other factors impacting the gender pension gap, according to Rozi Jones for Financial Reporter. She refers to research by insurance company Canada Life UK that reveals that 56% of women feel they are underprepared for retirement, in contrast to the 53% of men who feel confident about their retirement preparations.
“The research suggests another important factor is at play – women’s readiness to release equity from their property,” Jones writes. According to the research, 35% of women say they are likely to use the equity accumulated in their property in the future, while this figure sits at 46% for men. “This is despite the majority of women acknowledging their pension is worth a lot less than their property,” says Jones.
She quotes Alice Watson, head of marketing and communications at Canada Life Home Finance, who says: “We know that women typically have less in their pension pots, due to a variety of socioeconomic reasons. And our research earlier this year revealed a big gap between what women believe they need in retirement and what they will likely receive.”
The research Watson is referring to reveals that women believe they need £1,421 a month (after tax) to live comfortably in retirement. But it also says that on average, single female pensioners received £206 per week in 2017–18, suggesting that they could be short by £500 a month.
Financial Reporter article
Could care credit help?
In New Zealand, the interim retirement commissioner Peter Cordtz has been asked to consider a suggestion to help stay-at-home mums who are taking time out from work, according to Kate Hawkesby for Newstalk ZB. As part of the three-yearly Review of Retirement Income Policies he is looking into the proposal of a 'care credit', which could help close the gender pension gap.
“When you drill down on the numbers, the gap certainly is wide," Hawkesby reports, pointing to a University of Auckland research paper that shows "more than twice as many women than men aged 65 and over [to be] living in poverty". She also gives examples of why women might be taking time out of work, such as the fact that many Pasifika and Maori women care not just for their children, but their extended families too.
Cordtz will review how other countries have implemented similar credit schemes, such as Finland, Norway and Estonia. “Estonia pays employer contributions during childcare periods of up to three years per child. Norway credits individuals for periods of care work with approximately 71% of the average full-time wage. When women retire in Finland, their pension is topped up with contributions of up to three years per child,” she writes.
Newstalk ZB article
How else can the gender pension gap be closed? Leave your comments below.
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