The UK’s “unaffordable” childcare system is contributing to women being pushed into a £136,000 poorer retirement than men, according to experts.
Pension providers are calling on the Government, businesses and individuals to do more to help tackle the issue of the gender pension gap.
Women would need to work an extra 19 years than men to make up the shortfall, according to a report published by NOW: Pensions and the Pensions Policy Institute (PPI) this week.
“Systemic” issues were cited in the report for the significant gap in savings between the sexes, including women being more likely to take time out of work to take on unpaid caring responsibilities.
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Women in the UK face a £136,000 poorer retirement pot than their male counterparts
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Speaking exclusively to GB News, NOW: Pensions’ chief commercial officer Eleanor Levy broke down the long road ahead the country faces when it comes to tackling the discrepancy in retirement savings between men and women.
She explained: “There is no silver bullet, there is no quick fix. Some of the issues around the gender pension have been around a long time.
“The causes of the gap, including working patterns and women being the main carers, that’s not going to change overnight.”
Ms Levy highlighted “two particular points” which can be addressed in the immediate future to ensure pension equity: the cost of childcare and the removal of the lower earnings limit.
Last week, the UK Government launched a new recruitment drive to get more people working in the childcare sector through a £1,000 cash incentive.
In the announcement, it highlighted that families using the 30-day childcare entitlement could save up to £6,000 a year.
However, Ms Levy noted this saving will not be possible for a lot of families which will likely result in women having to raise their families and lose out on pension savings.
The CCO said: “That’s simply not affordable, not accessible for people. I know my nursery will not accept the fully funded hours.
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Childcare costs are among the contributing factors to the gender pension gap
GETTY“They will only accept two hours. There are loads of people, particularly women, missing out on pension savings all together.”
Her other recommendation is the lower earnings is withdrawn as women make up 79 per cent of workers who earn less than the automatic enrolment earnings threshold.
This means that 1.9 million women in employment are not automatically enrolled into a workplace pension in the UK.
According to Ms Levy, if age and earning thresholds were removed from auto-enrolment, an additional 885,000 young women in employment would become eligible for workplace pension.
In a message to future mothers, the retirement expert urged those concerned about leaving the workforce for a period of time to do their homework.
Ms Levy added: “Educate yourself. Understanding if you’re going on maternity leave, how that will impact your pension contributions.”