Men’s final salary pensions nearly double women’s at state pension age

[IwantToRetire]

Men’s DB (final salary) annual pensions are worth nearly twice the value of women’s, at £13,900 compared to £7,500 net per annum, while their DC (contribution) pensions are worth more than three times as much, at £90,000 compared to £28,500.

The findings come from a Department for Work and Pensions analysis of 7,802 adults aged 62 to 65 from the 1958 National Child Development Study, examining their preparation for retirement and overall pension adequacy.

Around 8 in 10 participants had some form of private pension, but women were more likely to rely heavily on the State Pension and less likely to meet a moderate Retirement Living Standard.

Meanwhile, nearly half, 47 per cent, of participants were expected to depend on the state pension for between 67 and 100 per cent of their retirement income. This group was more likely to include women, those with lower educational attainment, the self-employed and renters. Around half were also estimated not to have sufficient pension income to maintain their pre-retirement standard of living.

Continues https://corporate-adviser.com/mens-db-pensions-nearly-double-womens-at-state-pension-age/

Another factor that affects older public sector pensions is that in some male dominated professions, a full pension required less years contributions. I believe, because the assumption was that they would live less time in retirement.

This means that DH and BIL both retire with 2/3 of their final salary after 30 years of contributions. (Different emergency services). Meanwhile, despite earning more than them, my 1995 NHS pension of 50% for 40 years contributions, pays less. And actually I’m one of the lucky ones, as later pension entrants do less well.

I appreciate the thread is about structural inequalities, but I suspect that some of the data also comes from old vs new schemes and very few schemes available today have anything like the benefits of older pensions.

and very few schemes available today have anything like the benefits of older pensions.

Yes & that’s true for many private schemes too.

This. My choice not to marry means I have a pension from working full time for 42 years.

My choice to have my ds later means my career was at a more senior level so paid better, and I was able to afford good childcare. And my choice to only have one child means I could be there for my child and not have the issues of multiple pick ups and drops offs.

I think more young women will choose my approach in the future. They often out-earn men and are more efficient at domestic/financial planning, meaning they will be better off remaining single.

yep! Several times a week there are posts on mumsnet from exhausted women whose husbands have decided that even though they both work f/t the DC are her responsibility. Inevitably they talk about compromising at work or going p/t because they're knackered and their "DH" doesn't help

and yes to earlier post young women do out earn men but the kicker is always when children arrive. Then women stop out earning men.

Im not remotely surprised more and more women are choosing not to have children

Which is exactly why I always worked full time. I know plenty of women who came back part time after mat leave. They knew it affected their pension but thought their husband's pension would be enough. Even when the children no longer required after school /holiday care they carried on part time. Part time for 30/40 years is only equivalent to 15/20 years full time.
Sorry, but women really need to take control of this, be hard headed and think about all the 'what ifs'.

In my friends situation he was quite an abusive twat who was adamant he was having the career and she needed to tow behind. Ok if you think that’s a life choice she made. I personally don’t. I think it was abuse and coercion. Many women are in these relationships. On the surface they look normal. Underneath the women are losing out. Made to feel they have to sacrifice for the good of the men and their precious career.

Financial abuse and inequality within relationships are huge issues here too. A colleague with young children was recently considering dropping out of the pension scheme - in her words for “a few months”, though I worry she would not ever be in a position to opt back in again - as they are struggling financially at the moment. I think there is more of a tendency amongst men to prioritise their pensions, whilst women focus on feeding and clothing their children.

I am no Reform supporter, but the fact is that most Public Sector DB schemes are unfunded. Current employees pay contributions as do their employers, but rather than being ring fenced for those workers old age, they are remitted to the Treasury, and become part of the funding for current pensioners.

Therefore, our already hard pressed young workers of today, will pay ever more tax, not only towards state pensions but towards public sector pensions ( which as pp has pointed out, are not as generous as they were)

To my mind , this needs a major rethink.

Good point, but it is those in the private sector without DB pensions who are going to find it hard. This will be a disaster in the next 10 years.

I do actually agree with this but I don't think you are going to find solutions by weakening pensions either. The problem lies with issues associated with generational wealth and ultimately the boomer generation over their life time being net beneficiaries whereas you have gen z being net contributors over their lifetime.

You have to look at who of current pensionable age has effectively over benefitted on a societal level.

Reform aren't going to do this because their core base is in this group.

The whole thing sucks. I don't know what the solution is. I only know it's going to get a lot worse.

Less academic men would be plumbers etc -now they run their own businesses and have a good income and probably pensions. Many women’s jobs were not as well paid - eg hairdressing even thought they are often self employed now.

Returning to work part-time has a significant impact on your pension and the vast majority do not up their contributions.

I was horrified to find out one of my teacher colleagues had opted out of the TPS on her mat return so that she could cover nursery fees and her share of household expenses. She just hadn’t understood the long term of that decision.

I was a bit confused by your post because you said you wouldnt be happy sharing finances but then say your husband will be living off yours. So you are sharing finances?

[This is not intended to be in any way a critical response - I just was struggling to understand. I agree with the points you make].

There are lots of reasons why I chose not to have children and this is one of them.

I wouldn't personally take the risk but my husband has been happy to. At this stage of life (late 40s) his risk has paid off as we've been married a long time and I have a lot of assets and he'd be ok with the lifestyle half of that would get him. I wouldn't advise anyone to take the gamble that he has especially as it only really started being a proper high earner 20 years into our relationship.

Also he's happy with much less money than me and has zero financial ambition. He's an artist and I suspect has he not married someone with a good career would just be on the breadline and still making art.

I love him by the way - aware this all sounds rather cold. He has many wonderful qualities and it's worked out for us!

Edited to clarify - when I say he's happy with less than money than me I mean it as a hypothetical. Our finances are completely shared. I just mean he wouldn't be bothered with a lot less. He spends hardly anything although he has access to all the money including lots of investments in his own name.

Agreed this is a serious problem but again it's down to the parent's choice - only in this case he's making the choice for her.

The men who are abusive twats being abusive twats is something we need to tackle but it's going to be complex with no easy answers. Yet again male entitlement has knock-on effects beyond the immediate.

No final salary pensions in my home. We're both mid 50's. I worked part time but only got on top of my pension about 7/8 years ago. I'm hoping that because everything between spouses is inheritable without IHT that we can simply look at our combined pots of SIPP'S, ISA'S and his company DC pension.

I'd be interested to know what young women are doing about their pensions? Are they ensuring they are comparable with men's in the future.

Im in my 60s and planned my pension from my early 20s and worked accordingly - full time.

My anecdotal take is that yes young women are more aware of pensions and investment generally. The young people in my team seem more on it than I was anyway!

Can we also acknowledge that some mothers just don’t want to work or work full time?

I have never met a hairdresser who doesn't have a fancy car.

this is why we should be fighting against all the "well we agreed that I'd give up work because DH earned more" bollocks that turns up on all the relationship threads where someone has been a SAHM (i am not against SAHM) for 20 years and then faces a post-divorce life of penury.

We need to tackle the root cause of why women earn less over a lifetime.

And we need to make it easier for SAHP to be properly informed about pensions and so on. (i mean, so many families have an income slightly too high for child benefit so they don't claim because they don't get any. Do they clearly understand what that means for the SAHP's pension?)

But it is also why any government that moans that women aren't having enough children, and/or having them too late, makes it attractive enough for women/families to have children. So better maternity rights, leave and payment. Better pension coverage for time taken out to care for pre-secondary age/SEN children, etc etc.

I speak to lots of people who are retiring and many of them have FSPs.

But it is also why any government that moans that women aren't having enough children, and/or having them too late, makes it attractive enough for women/families to have children

Unfortunately that ship has sailed. No country has reversed birth rates once they are below replacement rate. Culturally there is a shift.

Dont want to, or know that if they worked full time they would also still be doing 100% of parenting and housework?

How many stay at home or part time mums do you know with housekeepers and nannies? Because saying they just ‘dont want to work’ when they are also talking in the lion’s share of work in the home, does not make any sense.