UK. Gender Pension Gap widens from the age of thirty-five
New research from Aviva has found the Gender Pension Gap begins to widen significantly from the age of thirty-five.
Based on the workplace pension employer and employee contributions of just over 2 million savers and retirees (1), the gap between men and women’s pension contributions for 35 to 39 year olds is 18%. It then increases to 23% for 40-44 year olds and 29% for 45-49 year olds. It then stretches to 35% for 50 to 54 year olds.
This suggests a clear line in the sand around the age that women are often making milestone career and childcare decisions and opting to work part-time (2).
The amount paid in contributions has a big impact on what is received at retirement and the difference between men and women’s contribution rates is stark (as shown in Table 1).
For most people, the effect of working part-time means a reduction in contributions paid into their pension. If a person opts to reduce their full-time working hours to three days a week, they might expect their pay and their pension contributions to reduce by 40%. However, because of auto-enrolment (AE) thresholds, the impact can be greater than that.
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