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Life

30th May 2024

‘Women need to work 8 years longer than men to achieve the same pension sum at retirement’

Sophie Collins

Pension

A new study has found that even in 2024, women need to work eight years longer than men to acquire the same pension sum

Citing maternity leave and other parental and familial responsibilities of women as the reasons for the gap, Irish Life confirmed the Gender Pension Gap in Ireland sits at 36%.

The Irish pension provider revealed this information in the findings of its 2024 Gender Pension Gap Report today.

It gave a clear snapshot of the inequalities between working women and men in Ireland, and looked into the causes while posing solutions for the government, employers and employees to close the gap.

The research analysed the data of over 130,000 Irish Life defined contribution plan members and highlighted the inequality faced by working women in Ireland when they retire.

The Gender Pension Gap is at 36%

2024 Gender Pension Gap Report

This means that women in Ireland would need to work eight years longer to retire with the same amount as men.

Causes 

As for what is to blame for this gap, Irish life identified salary differences and time out of the workplace as the main contributing factors.

It found that women’s salaries are on average, 22% less than men’s, combined with 6 years leave out of the workforce for women.

This amount of leave is put mainly down to maternity leave and family caring responsibilities and results in significant differences in accumulated pension funds. 

The impact of this aligns with the 2023 OECD finding that working women are 50% more at risk than men of pension poverty due to inadequate pension funding. 

This is particularly important as women can expect to live longer in retirement due to their higher life expectancy.

The data shows that the average age to start a pension is the same for both men and women and that men and women contribute comparable percentages of salary, confirming that saving habits play no role in the Gender Pension Gap.

Shane O’Farrell, Director, Employer Solutions at Irish Life, states: “While the Gender Pay Gap gets plenty of attention worldwide, the Gender Pension Gap is not as well understood. 

“This is despite the Gender Pension Gap being much larger and having a significant long-term impact. 

“The answer simply cannot be women continuing to work for 8 more years while the men in their workplace retire.

“As Ireland’s leading pension provider, raising awareness of this issue and shining a light on potential solutions is a key focus for us. 

“When it comes to levelling the playing field and remedying the Gender Pension Gap, we all have a part to play.”

Call for change

O’Farrell went on to explain that improvements can be made by implementing “the right reforms to gender-proof policy”.

He explained: “For example, with Auto Enrolment on the horizon, hopefully it’s not too late for government to act on this additional insight, which further highlights the need for flexibility to enable women to increase contributions and make up for periods of leave. 

“Employers can also play a key part by reviewing their own workplace benefits and designing initiatives with their pension provider, to economically empower the women in their workforce.”

Another option would then be for employers to help address the Gender Pension Gap at the source before it has a chance to compound.

By introducing “a pension specific workplace policy, adding an additional employer contribution for a period of time for women returning from maternity leave. We’ve taken this step ourselves to begin to address this gap.”

He concluded by saying: “There are plenty of solutions to help address the gap, but the first step is to shine a light on the issue and create awareness that women working for 8 more years than men clearly isn’t an option.”

The findings of this study show that overall proactivity is key, with Irish Life calling on all stakeholders, including government, pension providers and employers to play their part in reducing the Gender Pension Gap.

For further information, visit: https://www.irishlifeemployersolutions.ie/genderpensionparity/

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