Workplace Report July 2023

Equality news

Pay gap hits five-year high

The pensions pay gap between men and women has hit a five-year peak of more than £7,000, prompting calls for sweeping reforms of workplace pension schemes and legislation to place a statutory reporting duty on all employers.

Analysis by the Prospect union found that the average difference in pension income between the genders was 40.5% in 2020/21, its highest level since it reached 40.7% in 2015/16. That means on average a retired woman receives £7,100 less pension compared to a retired man.

The TUC marked the findings – released to coincide with gender pensions pay gap day on 29 May – by calling for changes to the rules governing auto-enrolment of staff in workplace pension schemes. More than 10% of women are in jobs where employers do not have to enrol them in the workplace pension, it said, while the figure is 4.3% for men.

Currently, employers have to enrol workers in pension schemes only if they earn at least £10,000 a year, and 1.4 million women workers earn less than this threshold. This is partly due to the unequal distribution of caring responsibilities between men and women and the impact of the gender pay gap over the course of a working life, it said.

The TUC has called for the £10,000 threshold to be removed, for minimum employer contributions to be increased, and for high-quality child and social care to be available for all.