Reporting transparency has rightly bought the gender pay gap front and centre in people’s minds. However, recent research findings from our colleagues at Mercer have highlighted that companies find the regulations ‘complex’, ‘confusing’ and ‘misleading’. Creating a narrative around the metrics is an obstacle for employers; there’s a fear factor at play when trying to tell the story and bring the figures to life. Is there fear that publishing gender disparities constitutes a tacit admission that firms are institutionally sexist? I’d argue not, as wider societal factors are at play, and the trend is towards equality, not away from it.
However, it’s not all about pay. Piggy-backing the issues of remuneration, are those surrounding the disparity in pension savings between men and women.
The data available from the ONS indicates the latest gender pay gap to be at 9.4% in favour of UK men. So how does this compare to pension savings? Our own research indicates that pension savings pots and funds are significantly more disparate than this figure, and demonstrates that the pension savings gap currently sits at around 40% in favour of UK men. How has a pay gap that sat at around 17.4% in 1997 resulted in a pensions gap over double that, 20 years later in 2017?
However, before we get carried away with comparing 9.4% with 40% it’s worth noting that the lower pay gap figure is very much a snapshot of the current situation and reflects our trend towards greater equality. The gender pensions gap is a reflection of decades of accumulation up until now, much of which was accomplished during the darker days of gender roles. Despite this, gender roles still contribute to a gulf between men and women’s pension saving. The questions is, are we happy with that?
Recent trends have indicated that women typically outperform men at GCSE, A-Level and Degree-level qualifications, and women typically earn more than men in their early career up to about age 30. The challenges for pension saving from a gender disparity perspective start here as the average age for a woman to give birth is currently 29 years old. (Typically) women take a period of leave from work, may not come back full time and also miss out on pay rises and promotions as their male counterparts progress into more senior roles. This has the effect of negatively impacting the gender pay gap and seeing a divergence in pension saving. However, societally as long as we’re challenging traditional gender roles it doesn’t have to be this way.
The fact remains that typically, one party in a relationship with a child, will leave the labour market either permanently, temporarily or partially to raise it. Stereotyping and assumptive behaviours have typically kept the man at work. It’s vital that UK employers engage in a dialogue to make couples and young families think more objectively about how this decision is made. In short, one person has to exit the labour market, but it doesn’t always have to be the woman, and it doesn’t have to be so black and white. Shared parental leave, flexible working and using technology to facilitate home-working can work to blur the gender preconceptions.
Additionally, targeted communications, at age and gender groups can be used to help individuals plan their finances through key life events and begin to support employees in the right way. Another could be enhanced maternity arrangements which seek to address not just reactive income and current finances but future proactive savings and retirement. Workplace engagement is central.
(For further Mercer viewpoint on the gender pensions gap please click here)