Addressing the gender gap in pensions

A recent (December 2024) National Women’s Council report highlights that auto-enrolment for pensions, while expanding coverage, does not resolve the structural inequalities faced by women – especially those in part-time, low-paid, or unpaid care roles. In fact, it could even make the gender pension gap wider.

The report, titled ‘Still stuck in the Gap – Pensions Auto-enrolment from a Gender and Care lens’ finds that the gender pension gap, currently 35% to 44%, may worsen. The gap is traditionally rooted in unpaid care work, as women’s lower pensions income are primarily due to lower earnings over their lifetime, due to maternity leave and unpaid leave to look after children and elders.

The new auto-enrolment (AE) scheme is based solely on paid employment, and as women are more likely to take breaks for care or work part-time, their pension contributions and eventual retirement savings, are lower than men’s.

The difference in care work between women and men is significant. According to Russell et al.’s 2019 study, Caring and Unpaid Work in Ireland¹, women spend an average of 21.3 hours a week on care activities – more than double the 10.6 hours that men spend. Most of this time is dedicated to childcare, with women providing an average of 19.1 hours per week, compared to 8.5 hours for men.

As a result of their unpaid caring responsibilities, women face a double disadvantage. They often earn less during their working years and, in turn, receive much lower incomes in retirement.

Since AE ties pension income even more closely to paid employment, it risks widening the gender pension gap rather than closing it. The report recommends that the government study and publish the gender and care impacts of auto-enrolment, including its effects on the gender pension gap, coverage, and adequacy.

How Zurich can help

By partnering with Zurich, employers can take active steps to reduce pension inequality – helping ensure that everyone, regardless of gender or caring responsibilities, can look forward to a more secure retirement. Taking a career break for childcare, caregiving, or other reasons, can affect your pension savings. At Zurich, we believe everyone should understand these impacts and have the support they need to make informed decisions.

Personalised financial advice

Zurich offers access to pension experts who can answer questions and help employees understand their individual situation – before, during, or after a career break.

Workshops and webinars

Our Customer Relationship Management team run regular on-site workshops and online sessions covering topics like planning for career breaks, maintaining pension contributions, and catching up on savings.

Online tools and calculators

Our digital tools help employees model different scenarios showing the potential impact of a career break and how different choices can make a difference.

Flexible pension solutions

Zurich has pension plans that specifically cater to part-time workers, ensuring minimum contribution thresholds are accessible and meaningful for all employees, not just those in full-time, well-paid roles. We can also support employers in setting up matching or enhanced contributions for employees who take parental or care leave, reducing the long-term impact of career breaks.

How an employer can help

• Automatically enrol employees into your company pension scheme, to ensure they are receiving higher contribution rates than auto-enrolment.
• Promote flexible working arrangements for all, helping to balance responsibilities across genders.
• Champion equal pay within your business.

On the bright side, AE will raise awareness and promote the benefits of broader pension coverage, which could encourage more women to seek financial advice and take positive steps towards closing the pension gap. This is an important step forward. However, it’s important to remember that auto-enrolment won’t address everyone’s needs equally. In many cases, the benefits offered may differ from, or may not fully match, those already available through workplace pension schemes, meaning the pension gap could still persist for some individuals.

Find out more

Speak with a Financial Broker or visit zurichcorporate.ie to find out more about Zurich’s corporate pension solutions.

Source:

¹Russell, H., Grotti, R., McGinnity, F., and Privalko, I. (2019). Caring and unpaid work in Ireland. ESRI and The Irish Human Rights and Equality Commission (IHREC).

Read the full ‘Still Stuck in the Gap’ report on https://www.nwci.ie/.