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Pension inequality: what is it and how is it impacting the women in your business?

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July 09, 2024

We recently hosted an event alongside 100 Women in Finance, aimed at engaging women with their pension and empowering them to take control of their financial futures. Among other things, the event helped to illustrate the hidden differences between male and female pensions, one of the most prevalent being the average amount in the funds themselves.

The pension gender gap in Ireland is a significant issue, as highlighted by data from the Irish Longitudinal Study on Ageing (TILDA). This comprehensive study reveals that the average pension income of retired women is 35% lower than that of retired men, with the overall pension gender gap nearing 40%. A critical factor contributing to this disparity is the difference in private and occupational pension coverage: 55% of retired men receive such pensions compared to only 28% of women. This difference is compounded by the fact that women, on average, live 3.9 years longer than men, meaning that many women face a longer retirement than men and have less money with which to fund it.

Employment history also plays a vital part in the gender pension gap; a staggering 93% of retired men had worked for more than 30 years, compared to only 33% of retired women. Conversely, 22% of retired women had never worked, compared to just 3% of men. The traditional role of women as caregivers significantly impacts their career continuity and progression, which in turn affects their pension entitlements. This caregiving responsibility often leads to career breaks or part-time work, reducing lifetime earnings and pension contributions.

Ireland's national gender pay gap, reported in 2023 that women are paid 13.7% less then their male counterparts, which is one of the primary causes of this gender pension gap. These statistics underscore the broader issue: women tend to retire with less financial security than men due to shorter working careers and lower pay during their working years. This enduring inequality in pay and pension benefits highlights the urgent need for policy interventions aimed at closing both the pay and pension gender gaps.

It’s therefore vital for businesses to educate their people – especially their women – on the existence of the gender pension gap, the factors that have caused it, how to navigate it, and how to grasp their financial futures with both hands. The delivery of this education can be tailored depending on what will help produce the best outcomes for your people; it could be an in-person event (much like our recent panel discussion with 100 Women in Finance, for example), or it could be delivered by distributing relevant resources and communications.

On our recent event, see below commentary from those in attendance:

“The focus of the event was to equip women with the knowledge and tools to take control of their finances and reiterate the importance of planning for retirement. A recent study into the gender gap in April, highlighted the pension inequality faced by working women and found a 36% gender pension gap. Many factors for this include maternity leave and family caring responsibilities which lie with the women. Given this huge gap, women must take control of their finances and prepare for the future, so they are not left in a financially unstable situation in retirement.

The NFP team, Sinead Cullen MSc QFA FLIA SIA RPA, CTA Claire Battersby QFA APA RPA, and Louise Gallagher QFA took part in an interactive Q&A where they addressed the reasons for the gender pension gap and showed anonymised real-life examples of clients who came to who engaged with Sinead on their a financial plan, and the difference it made to their future. The NFP team helped the audience understand the importance of planning effectively and how they approach financial planning. NFP financial advisors embark on a journey with their clients. They are there to support you reaching your life goals and help navigate through the curve balls that life throws at you.”


Author

Sinead Cullen MSc QFA FLIA SIA RPA

If you’re looking to discuss your pension with an experienced specialist, get in touch to see how we’re able to support you to plan for the financial future you deserve.

Email: wealth@nfpireland.ie
Phone: 0867 925 058



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