The gender pensions gap – the inequality between men and women’s pensions – is currently more than double the size of the total gender pay gap, with the average female pensioner £7,000 a year poorer than her male equivalent.
Our new report, ‘The Gender Pensions Gap: Tackling the Motherhood Penalty’, highlights that childcare costs are widening the gender pensions gap, with almost 4 in 10 mothers who reduced their working hours after having a child, saying they’d work more if childcare was cheaper.
Our survey of 2,000 mothers across the UK, with children under the age of 10, carried out by You Gov, found that after having children
- nearly half (44%) reduced their hours
- more than a third (36%) left work altogether
- more than one in five (15%) returned to work in a lower grade or lower paid role
These changes in women’s working lives have a significant impact on their ability to save for a pension at the same level as men; women are likely to stop or significantly reduce their pension contributions, meaning they may miss out on employer contributions and lose the investment gains their contributions would earn.
While many women choose to reduce their hours or stop working because they want to spend more time with their children, we found that the cost of childcare played a key role in women’s decisions.