In 2012, the year in which auto-enrolment was introduced, just under 5.1 million women were contributing to such a pension with just under six in 10 (59%) participating. This has since seen a steep increase with nearly nine in 10 (88%) eligible women now investing for a secure later-life through a workplace pension.
Chris Connelly, Propositions & Solutions Director at Equiniti’s pension business, is delighted to see such vast leaps forward in female pension participation but warns more needs to be done to help women generate more income in retirement, commenting:
“The success of auto-enrolment has been well-documented, and it is heartening that women are also benefiting from what we now have in place. Getting people started on their retirement savings journey is a crucial step towards ensuring they will have enough in their pot to enjoy a secure later-life and auto-enrolment is evidently addressing this issue.
“However, women are still reaching retirement with significantly less in their pot than men for a number of factors such as, lower average incomes and the unequal burden of care responsibilities for both children and elderly relatives.”
Another promising finding from the statistics is that lower earning and part-time female workers have benefitted the most from increased participation levels.
There was a consistently high level of participation from women earning over £30,000, however just four in 10 (42%) of those earning £10–20,000 and six in 10 (61%) of £20–30,000 were paying into a workplace pension. This has now risen to 83% and 89% respectively, with around 3 million more women now contributing, and is on track to reach parity with their higher-earning counterparts in the next couple of years.
Across the same time period, the proportion of women working part-time in the private sector, participating in a workplace pension more than doubled from just over a third (36%) to four-fifths (80%).
Chris Connelly commented: “One of the most striking features of auto-enrolment’s success is how it has managed to get those on lower earnings, including those just starting out in the world of work, into pensions with a low opt-out rate. It is great to see that it has had such a radical effect on part-time women in the workplace, not just full time.
“As mentioned previously, the next target is encouraging women to choose against opting out as the proportion of income they invest increases, and encourage them to take advantage of employer contributions by putting more of their own salary in. Even small increases should go a long way to ensuring they have a far healthier pot of money by the time they are reaching retirement age.
However, pension policy and strategy cannot do this on its own. It remains vitally important to address the whole welfare agenda, including access to affordable childcare, flexible working for parents and managing the costs of long-term care in later life.”
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