Recent research highlights the stark income disparities faced by single parents, particularly women, impacting their ability to save for retirement. Research by NOW: Pensions, data reveals that single fathers earn 32% less than the average man, while single mothers face even greater challenges, earning 53% less than men and 37% less than women on average. Moreover, single mothers exhibit the lowest labour market participation rates, further exacerbating their pension savings prospects.
Women in the UK retire with significantly smaller pension pots, averaging £69,000 compared to men's £205,000, largely attributed to differences in career trajectories. On average, women spend 10 years away from work for caregiving responsibilities, resulting in a £39,000 loss in pension savings.
Despite advancements in gender equality, traditional caregiving norms persist, disproportionately affecting women. Moreover, many working single mothers are ineligible for workplace pensions under current auto-enrollment rules, missing out on employer contributions and tax relief. This discrepancy, compounded by high rates of part-time employment, perpetuates the gender pension gap.
NOW: Pensions emphasises the need for policy interventions to address these disparities, advocating for affordable childcare and improved access to pension schemes. The Pensions Policy Institute underscores the broader systemic challenges in labour market conditions and calls for comprehensive policy measures to enhance retirement outcomes for single parents.
Neha Mehta, CEO and Founder, FemTech Partners. Author One Stop: Untold Story of Super Apps told Asian Voice, “In Asia, single mothers face similar challenges, with many earning significantly less than their male counterparts and experiencing a considerable gap in pension savings.
“According to recent studies, single mothers in Asia earn approximately 37% less than the average man and 25% less than the average woman. This disparity is further exacerbated by the fact that women in Asia retire with pension savings averaging only around $50,000, compared to men's $150,000.
“At FemTech Partners, we have been actively working towards addressing these issues by investing in and supporting initiatives that promote gender equality in the workplace. We advocate for policies that facilitate accessible childcare, promote flexible work arrangements, and ensure equitable pension contributions for all genders. To combat the pension gap specifically, we have been collaborating with financial institutions and policymakers to develop innovative solutions tailored to the needs of women, especially single mothers. By providing them with access to financial education, retirement planning services, and alternative pension schemes, we aim to bridge the gap in pension savings and empower them to secure a stable financial future.
“It is crucial that we continue to push for systemic changes and create an inclusive and fair environment that values and supports the contributions of all individuals, regardless of gender. Together, we can work towards a more equitable future for everyone in Asia and beyond.”
Shaista Gohir OBE (Baroness Gohir of Hall Green), CEO of Muslim Women’s Network UK told the newsweekly, “Generally women need to be paid more which results in higher contributions towards their pension by them and employers. Women are more likely to take career breaks due to caring responsibilities. If they receive child benefits then they receive national insurance credits. Similarly, if time is taken out for caring but for a non-child-related reason, they should also receive similar credits. Also, better support to help women return to work after they have taken a career break due to caring. Also, women are opting out of pension schemes due to the cost of living crisis. If you can't afford to eat and pay your bills, which is an immediate need then you are not going to be thinking about far into the future.
However, the pension situation is worse for minority women as they will face pension poverty in the future. A high proportion of black and Asian women, particularly Pakistani and Bangladeshi women, have not saved for their pension. These women have higher unemployment rates. When they are at work, they are more likely to be in lower-paid and part-time jobs. Those who can afford to pay into a pension sometimes don't due to the lack of knowledge about pensions.”
