Women can expect to be shortchanged by their pensions to the
tune of nearly £47,000 ($59,000) over their career, according to a new study released
by Zurich Insurance.
The inaugural Zurich Workplace Savings Barometer found
a significant gap between how much money men and women receive in employer
pension contributions over their working lives.
The shortfall has been attributed to a combination of factors
that can disproportionately disadvantage women: The gender pay gap, which leads
to a lower value of employer contribution as a percentage of salary, the fact
that women are more likely to take career breaks to raise a family; and because
men typically work in sectors with more established—or more generous—pension
The study, which analyzed more than 250,000 pension plans, found
that since 2013, women have received, on average, 1% of their salary less in
employer pension contributions each year when compared to men.
In 2016, women under 35 received, on average, £217 ($272) less
in employer pension contributions than men in the same age range. Women between
34 and 44 received £594 less than men; women between 44 and 54 received £1,287
less, and women between 55 and 64 received £1,680 less.
Additionally, between 2013 and 2016, men benefitted from
pension contributions of 7.8% of their salary each year from their employers, compared
with 7% for women. This creates a double whammy for women, who already lag
behind men in salary, which meant that the value of the employer pension
contribution was £3,495 ($4,387) for men and £2,489 ($3,124) for women. With
wage growth taken into consideration, the difference could translate to a
shortfall of £46,689 for women by the time they reach retirement.
“The impact of the gender pay gap on women’s pension pots is no secret, but
this difference in the contributions that they receive from their employer
presents a serious–and growing–problem,” said Rose St Louis, Head of
Partnership Development - Zurich UK Life at Zurich Insurance, in a statement.
“We can’t ignore a £47,000 shortfall,” she said. “Workplace
engagement and guidance has a central role to play in helping women make the
most of their saving potential while they are working full time.”
There were also more men in the UK.-wide analysis (154,999 vs. 95,262 women),
indicating that, even before the gap in salaries and contributions levels has
an effect, there are significantly more men receiving pension contributions.
By Michael Katz