Tax, investments and pension rules can change over time so the information below may not be current. This article was correct at the time of publishing.

Key disadvantages for women’s pensions

Gender equality has been at the forefront of many debates for years. However, equality is still a long way off when it comes to women’s retirement savings.

Below are some key disadvantages women face when it comes to their pensions.

Maternity leave

Women who choose to take extended leave beyond their paid maternity leave lose out on their employer paying into their workplace pension. The State Pension is protected during the unpaid leave but workplace pensions are not. If women opt to take 52 weeks leave then 13 weeks are unpaid leave with no pension contributions.

State pension

Women who take time off work to care for their children risk losing out on National Insurance Contributions. This is unless they claim child benefits even if they are not entitled to it. Claiming for child benefits will mean that women will collect National Insurance credit even if they do not receive any child benefits.

Many women assume that as they are not entitled to the benefit then they should not apply. However, it is important to do so to receive the credit as if women do not have 35 years of National Insurance contributions, then they will not receive the full state pension. National Insurance credits can only be backdated by three months.

Multiple jobs

It is common for women to have multiple small part time roles that fit around childcare.

Women with several jobs may miss out on workplace pensions. If women have more than one low paid role then neither employer has to auto-enrol them into a pension if each single job pays less than £10,000 per year.

Part-time roles

As mentioned above, women often transition to part-time roles after starting a family.

This can be a significant disadvantage to women’s pension pots as part time work is often paid lower than full time salary roles. This means that the percentage being paid into women’s workplace pensions could be a lot lower than it would be for working a similar role full time.

38% of women are employed part-time compared to just 13% of men (HOF, 2021). Pay for full time roles is often salary and is typically higher than hourly rates paid for most part time roles.

Plan for your retirement today

Despite the disadvantages stated above, there are lots of steps women can take to plan for their retirement and create a financially secure future.

To start planning your retirement, book a no-obligation meeting with a financial adviser at Four Wealth Management to discuss retirement planning today.

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‘Women and the economy’, House of Commons Library, 2021

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Key disadvantages for women’s pensions
FourWealth Management