personal finance

Pension warning: Part-time workers could be missing out on ‘vital’ pension contributions


When it comes to retirement, forms of income may include the state pension and private pension wealth. The latter may be built up during one’s working life. Some employees will make pension contributions via auto-enrolment, which sees their employer and the Government also pay into the workplace pension. Today, the Office for National Statistics published the latest employment rates of men and women with dependent children in the UK in 2019, based on data from the Labour Force Survey and Annual Population Survey.

The survey found that in April to June 2019, three in four mothers with dependent children (75.1 percent) were in work in the UK.

In comparison, more than nine in 10 fathers with dependent children (92.6 percent) were in work during this period.

The report also revealed that almost three in 10 mothers (28.5 percent) with a child aged 14 years and under said that they had reduced their working hours because of childcare reasons.

This compared with one in 20 fathers (4.8 percent).

Tim Vizard, Policy Evidence and Analysis Team, Office for National Statistics, commented: “In 2019, three-quarters of mothers with dependent children were in work, up from two-thirds of mothers at the start of the century. In comparison, over nine in 10 fathers were working.

“Many parents make changes to their work to help balance work and family life.

“Almost three in 10 working mothers said they had reduced their hours to help with childcare, compared with one in 20 fathers.”

Eleanor Levy, Director of Marketing and Communications at NOW: Pensions, responded to The Office for National Statistics’ publication of statistics on ‘Families and the Labour Market’ today, highlighting how part-time workers may not reach the trigger for automatic enrolment into making pension contributions into a workplace pension.

Ms Levy said: “While it’s great to see that more mothers than ever are in work (75.1 percent), almost three in 10 mothers (28.5 percent) with a child aged 14 years and under said they had reduced their working hours because of childcare reasons. This compared with one in 20 fathers (4.8 percent).

“Working part-time has the biggest impact on workers’ pension savings, as it means they may not reach the £10,000 auto-enrolment threshold, and could, therefore, miss out on vital pensions contributions.

“The findings also indicate that having children is a major factor preventing many mothers from working a full week.

“Our research found that working part-time to balance caring responsibilities has the biggest impact on women saving for their futures.

“By their 60s, women typically have £51,100 in their pension – just one-third of an average man’s £156,500 pot.

“So, while these results point to encouraging signs for our workforce, more must be done to ensure that everyone has an equal opportunity to save for a successful retirement.”

Elsewhere in gender pension gap research, the median pension wealth for divorced men and women in their 60s is £103,500 and £26,100 respectively.

Approximately 10 percent of men and 14 percent of women in their early 60s are divorced, with the Pensions Policy Institute report “Understanding the gender pensions gap: report sponsored by NOW: Pensions”, saying that this indicates a pension wealth reduction of a third for men and half for women.



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