Caught in a gap: the role of government in enabling women to build better pensions

Winton A, Plowden-Roberts C, Mason B, Edney C, Talbot J, Gloster R |   | Phoenix Insights | Jan 2023

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The Institute for Employment Studies has partnered with Phoenix Insights to develop two in-depth reports which analyse women’s finances through the lens of the workplace.

The first report set out the actions that employers need to take. This second report sets out the actions that government should take to ensure women can accumulate sufficient pension savings for a good standard of living at retirement. The evidence shows four key areas that require government attention:

Accessibility of workplace pensions

This report finds that income inequality, the cost-of-living crisis and life events that reduce earnings all impact an individual’s capacity to save. Thus, there are a range of targeted interventions that are needed at different stages to ensure that those, who disproportionately are women, do not have to pay a penalty for caring and can access financial support when needed.

Financial engagement 

Without a sufficient understanding of how pensions work and how different life events can impact them, individuals cannot make informed decisions about how they choose to save for the longer term. While employers have a role to play in this education, government is best placed to ensure that the full range of stakeholders are positioned to engage in behaviours that will help close the gap, from education and support providers through to employers and individuals themselves.

Access to care

Limited access to affordable child and social care is reducing the ability of women to engage full-time in paid employment which is having a detrimental impact on their ability to contribute to their pension, as often women are left with no choice but to work part-time. If care was made more accessible, women would have fewer constraints on their return to paid full-time employment.

Access to flexible working

The case has already been made for flexible working and the change employers can make to help reduce the gender pension gap (Phoenix Insights, 2022), yet government action is also needed. The new flexible working bill is welcome, but more needs to be done to ensure that ‘two-tier’ workplaces do not develop (i.e. where more accommodating employers approve flexible working requests and others do not).