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/

Personal choice has to be a factor though, too many women sleep walk into dependency and find themselves in very difficult financial circumstances. Working or staying home with the kids is, for most, a choice, prioritising the man’s “big job” is a choice, working part time is a choice. Pretending women have no agency in their own lives is patronising, pretending that our life choices have no impact on earnings and pensions is dilusional.

Why is feminist to pretend women have no choice or agency?

There needs to be much more discussion about the impact on pensions of part-time work but when I've raised this many women just don't want to know. My own sister says that her husband deals with "the money stuff" as though its the 1950s!

When I dropped down to 3 days, I increased my contributions to ensure I was still paying the equivalent of full time work into my pension pot. Obviously it's a cost and one not everyone can afford but it was a non negotiable for us.

I think we were probably a lot more aware of the issues because DMIL got scuppered by her late husbands pension provider and has ended up dependent on her much smaller pension.

No, I thought we were discussing the societal and cultural factors that strongly influence those choices.

There needs to be much more discussion about the impact on pensions of part-time work but when I've raised this many women just don't want to know. My own sister says that her husband deals with "the money stuff" as though its the 1950s!

I am very hot on dealing with "the money stuff" but I fully admit that when you have newborns, mat leave, childcare costs, benefits eligibility, housing costs etc to analyse, pensions tend to fall into "I'll deal with that later".
So yes, I hope it's more emphasised now.

It’s looking at a very specific age demographically.

I knew all about pensions and started one at 21 and I’m close to the age in that study.

Information is out there my DB pension is 10k PA and I have another small private pension.

Women these days have a world of information at the touch of a button about all of these issues but either make zero effort to find out or have poor comprehension. When I was young there was no internet, no chat forums nothing, but I bothered to find out.

If a woman is abused and coerced she doesn’t have a choice but without that we do have choices and to say we don’t makes us look weak minded. What women of that age did have going against them was the notorious element of work of equal pay for work of equal value. I was involved with that campaign as a regional trade union rep from my council branch in the late 1980’s and 1990’s Plus the demographic regarding traditional male and female jobs is changing. My DH is an engineer and there were less than 5% of women on his course, he ended up lecturing and now it’s at around 30% women on the course he taught on.

I think the desire to have children clouds judgement in some women. Seen it myself among a couple of friend's who gave up good careers to be SAHP. But if it’s what the heart desires that’s it I suppose.

One thing people are missing, most companies stopped Final Salary pensions 20-25 years ago.

They were unsustainable. Not helped by the final pay rises just before people retired so not just bumping the person's Salary but bumping up the pension at no perceived cost to the company.

Few men stay with the same company for life. And probably even fewer women. Many women will have moved jobs, as their kids have become more independent.

So its a bit like looking at a small bit of the puzzle and not looking at the big picture

@loislovesstewieto not distill the problem or solution to one factor which is ‘they have free choice’. Life is not that straightforward for many women. We have societal expectations and pressures on us, many women start relationships thinking they have choice only to discover their careers have been minimised, many women are excluded before they even begin in the jobs market, many more women become carers for disabled or SEND children than men etc etc.

I tend to agree with the statement above that many women sleepwalk into dependency BUT that is because the role of women as homemaker, default parent, default person to make sacrifices is still so much more engrained than it should be. It is society that pulls women towards a lack of/poor choices that undermine their economic independence.

I watched my mum not work, be ridiculed by my dad for her lack of intelligence, the value of what she did to raise 3 kids and keep our home together completely unrecognised, only for my dad to waltz off with his OW when my youngest sibling turned 16. Bullied my mum into accepting poor divorce terms (she should have gone after his pension and she didn’t) and so she lived hand to mouth for years in a small flat. She did remarry after a decade or so of misery - transferring her dependence to another man and is happy, but I swore to myself I would never ever be financially dependent. We were also not well off on my dad’s salary (but also due to his poor choices) and I also knew that I didn’t want to be always worried about money.

So, I focused on earning money, purely to create a safety net. I really pushed myself. I also married a man who didn’t expect me to sacrifice as a default. He’s my equal partner. We share the same values and principles and the domestic load. He would call himself a feminist and acts like one. I have been so boring with my decisions - maxed out pension contributions, put bonuses into pension instead of splashing out on the designer bag I fancied, one car, smaller house, paying off mortgage faster when interest rates increased. I have a financial advisor and he says that he still sees relatively few women, and especially those who have set themselves up for retirement well and independently. Even financial advice feels like such a male space that is not typically one that women access.

Flexible working is one way of helping women to keep building their pensions. It also facilitates fathers to share the load.

The optimum is for both parents to work 80% I.e. 4 days do each has a full day looking after DC with 3 days in nursery.

This requires employers to embrace true flexible working and recognise that 4 days is 80% of the job rather than doing 100% of the job in 80% of the time.

There is in my experience a lack of creativity in what flexible working can be for both employer & employee.

Job share doesn’t necessarily mean splitting a 37.5 hour week. It could be splitting 52.2 weeks so one works full time for 30 weeks during term time. The other works full time for 22.2 weeks during school holidays.

Part of this is about financial education so everyone is taught about the importance of pensions, the impact of compounding etc.

OK. I'm from a working class background. No one was able to help me with money, because we had none. The best piece of advice my dad gave me was to find a job with a pension, so I did. I always worked full time, my children have either chronic health issues or additional needs. I didn't find it easy, it was tough. I had no parents to help me, we had to pay for childcare. Many of my colleagues worked part time, including a couple who only worked 2 days a week, so 40% of full time. They also had family help but decided 2 days was enough.
I'm now retired, they are approaching retirement. I get the full pension they won't. Neither has ever worked full time.
They made a choice, I made a choice. I don't see any pressures on any of us. They wanted to work part time. That was their choice. I didn't for the reasons I have already given. Maybe they hope they will be left an inheritance. That's fine. But as we know you can't rely on that. I decided to rely on myself. That's a choice.

What really galls me, to be honest, as i am approaching pension age (which was 60 when i started full time work and has crept slowly upwards) is the attitude, as pp above, of people i worked with who firstly complained i never joined in extra-curricular (to work) activities because i had small children, who magically managed to get after work events switched to lunchtime events when they had kids, worked part-time after i went toe-to-toe with management to push it through, then moaned that they didn't have enough time for shopping, then moaned at me when i suggested going for a film after work because "it's ok for you, you don't have kids at home" to now moaning that they are being told they have holes in their pension contributions and being advised to fill them - apparently i'm selfish for not having much much more sympathy.

The information is out there. I still bring other women's attention to it just in case they didn't know. And i try to push back on the "oh we're fine Mr Big Job And Salary has it all covered. Especially the ones where i know Mr Big Job has a Mr Roving Eye too. We can only do so much. And part of that so much is educating our children (whichever sex) that Pensions Are Important.

"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..."

I'll admit I haven't actually looked at the link (yet), but i find those figures literally incredible.

I agree the final salary annual pension values of £13.9k and £7.5k look about right (although they still seem a bit high to me for an average value) but are they seriously saying that the annual value of a man's defined contribution pension is £90k pa and a woman's £28.5k?

I find those DC pension figures ( especially the 90k value) very hard to believe - which leads me to wonder about the other figures...

Women, too often, ignore their pensions. Mr Roving Eye will have to share his upon divorce by the way.

It’s a case of childcare being the responsibility of single mums and it’s often these women with low or no pensions. Others have pensions but make lower contributions than men because they don’t want the commitment men make to their work. I’ve seen many women really not want promotion or responsibility. So if they don’t want that, they don’t get the pensions.

State employees get way more too and I barely know a teacher who has worked beyond 60 and no doctors. The government gives them amazing pensions by making huge contributions. The self employed get £0 from the government (doctors 24% gov contribution) and they are often the worst off as they don’t have pensions at all unless they have paid in - and many don’t. Especially women. Education is vital but cost of living is not helping.

@loislovesstewiegood for you, I too forged a similar path but I choose not to be smug and accept that it’s not that simple for many women. I don’t have to battled exorbitant rents that my daughter now does, I was lumbered with a costly student loan that she now is.

My first job in the NHS was as a superannuation clerk in 1988 when NHS pension records were still maintained on paper at a local area health authority level. Only being transferred to the NHS Superannuation Branch every 5 years.

At that time there was a definite NHS policy to encourage new recruits (who were mostly women) to opt out of the NHS superannuation scheme by completing what was called a form SD502. It was a cost cutting scheme.

This was also exacerbated by a loosening of financial regulation rules which saw the emergence of a lot of so-called "financial advisors" advising their clients (especially women) to opt out of final salary schemes (especially public sector schemes) and instead pay into new personal pension schemes.

Future events would suggest that his was almost always a very very bad idea for the people (mostly women) who opted out...

True, but the study is of people in their 60s, who may well have all or part of their workplace pensions in DB schemes.

There's plenty of us on Mumsnet pointing out to women not to go part time or reduce hours or stop work without thinking about the impact on their pension.

I also think women should pushback if there isn't an equal contribution to a household tasks and childcare

Women, too often, ignore their pensions. Mr Roving Eye will have to share his upon divorce by the way.

for sure, but - and i am also on the thread with the woman whose husband is leaving her and she had no clue about going for half his pension after 20 years - there are women who still don't know this stuff.

I am guilty of going onto one or two of these threads pretty late on and pointing out that carrying on working, or making sure your partner makes pension contributions, and making sure your employer is making the right contributions while on mat leave - because i am getting rather annoyed and impatient of so much willful blindness to this.

And what really galls is young women blithely going into this kind of situation, not even married, no house in their name, having a baby and giving up work - who are roundly and soundly criticising the WASPI women for being stupid (yes, have gone through this elsewhere more than once)

perhaps we need a thread in Relationships to discuss this and do an AMA or something?

I am a public sector employee
I could earn triple what I earn now if I moved to the private sector. Partly I work in the state sector out of a sense of public service but also what helps me balance the loss of salary is the knowledge that I have a decent pension package. That plus it is actually is a really good employer from the perspective of juggling parenthood around my work. I am able to work full-time in quite a senior role while still seeing plenty of my children (because I am able to work flexibly so even though I do long hours I can fit them around my children)

My pension is part of my contractual package, if they chipped away at that I would just move to the private sector and earn triple. Any of my private sector peets who envy my pension are welcome to apply for a job in the state sector

It’s a case of childcare being the responsibility of single mums and it’s often these women with low or no pensions.

that's a great point. So there needs to be a much much more robust system of making fathers pay for their children. Garnishing wages, at the least. Even to the extent that the state makes an estimate - based on the father's income/assets - and they pay it to the children's other parent, and get it back via taxation or whatever from the NRP. Making it into an actual debt that must be paid back.

And what really galls is young women blithely going into this kind of situation, not even married, no house in their name, having a baby and giving up work

I agree and I expect their " partners" - who " don't believe in marriage" or " don't want to waste money on a wedding " or just drag their heels continually - know full well what they are doing

it is infuriating. My slapping hand gets really really twitchy on so many of these threads.

And it's not just that i would advise all women to marry before children - i would advise the less well off/lower earner/fewer assets partner to push for marriage. Even if that is the man.

I'm not being smug. I'm pointing out that coming from a working class background, I knew that life would be tough. I didn't expect anything else, God knows my early life was spent in abject poverty. I'm not asking people to get their tiny violin out, that's just a fact.
Consequently I understood that I had to stand on my own 2 feet, think about the future and just get on with it. I do feel some satisfaction from knowing that I made choices that benefit me now. That I didn't have to rely on my husband, who died 4 years ago, for money. Clearly I'm also lucky because I get a share of his pension.
I didn't moan when I went home knackered to find that one if us had to accompany child to hospital and stay half the night, while the other stayed at home to parent the other. Life is tough for many. I feel lucky that I took dad's advice. I'm lucky because I own a nice house on the coast. Life is still hard, there are things I can't change, but I made a choice about working and my pension that was right. And I also paid exorbitant rents when I lived in West London as a young adult, the answer was to move out of London, away from DHs family, so we could find a cheaper place to buy.
Again that was a choice. Life is about choice.

But the issue is still structural and systemic disadvantage.

Yes. There are also issues because of some women taking time out for children or other caring responsibilities, and if a relationship breaks down, it's more likely to be the woman bearing the brunt if childcare in terms of time and money, and getting men to pay fairly is... see many past threads. (It's not only about children - I remain single and hildkes in my 50s.)

But also - if you're on a low wage (and women's work is often valued less than men's, and average wages in an industry may go down as that industry become less male-dominated,) If you're on a low wage, you're lucky to cover rent/mortgage, bills, food, etc, and you can't put more into AVCs. You aren't likely to get a bonus that you can put into your pension.

I have mostly spent my time in a male-dominated sector, so pay hasn't been too bad overall - but I have not always been paid equally. When I finally got a 23% payrise in one company, 7% in another and other increments just to level me up to my male peers, you can be sure they didn't backdate the pay or pension contributions, and 5% of £20K is half of 5% of £40K or whateverone is paid. Perhaps if it had gone to tribunal it might have, I don't know, but at the time, I got the payrises when I was just starting to point out the inequality. Woud i do it differently now and fight for the pension too? I don't know. Naively, in my 20s, Equal Pay having become law before I was born, I never expected to fight for it.

My union has been doing some work on the gender pension gap, but I admit I'm not up-to-date with the latest status on that.