What is the Gender Pension Gap?

What is the Gender Pension Gap?
What is the Gender Pension Gap?What is the Gender Pension Gap?

Research commissioned by NOW:Pensions reveals that women are reaching retirement age with bigger pension savings gaps, compared to men, than ever before.

Much attention is given to Gender Pay Gaps. Gender pay gap reporting is a requirement set out by the Government Equalities Office and applies to public authority, private and voluntary employers in the UK with over 250 employees. From 2017 onwards, employers have been required to calculate gender pay gaps for the previous payroll year.

Despite Gender pay gap reporting having a lot of visibility, little or nothing is being said about the huge imbalance of pension provision between men and women.

The average woman in her mid-60s has been found to have a pension pot of £69,000, while an average man of the same age will have a pension pot £205,800. This means the average woman has 33.5% of the pension provision that the average man of the equivalent age does.

This can lead to significant financial hardship for women in later life, or the need to continue working after reaching UK retirement age. Alternatively, it could lead to reliance of a women on her partner who may have better financial provision.


How does PayCaptain help?

PayCaptain’s core values centre around improving the current financial wellness of employees and helping them to increase their financial resilience for a better future. The PayCaptain app contains a host of innovative functionality that can help women close the Gender Pension Gap and have better financial well-being.


PayCaptain integrates with Collegia, a UK-based sustainable pension provider that offers a combined Auto Enrolment and Personal Pension plan. This means employees can build their pension pot in one place. Collegia’s solution also allows multiple employers to contribute simultaneously to a members’ pension.

Access to an employee’s digital pension with Collegia is possible through the PayCaptain mobile app and the live pension pot can be viewed in real time. The integration provides employees with ease of access to all their financial information in one place.

It also displays the forecasted pension income based on their estimated retirement date. By having such information at their fingertips, employees are more aware of their future retirement provision which means they can make more informed decisions for future contributions.

Digital pensions are still a relatively new development, but they are growing in popularity as more pension providers recognise the benefits they offer. For members, digital pensions offer greater transparency and flexibility. Members can easily view their pension pot and keep track of their contributions, allowing them to make adjustments to increase and improve their future pension position.

Digital pensions also offer the ability to make ad hoc or one-off contributions. These be helpful for those who have irregular income or for those who receive performance related pay or bonuses. These can be added to the pension to make better financial provision for later life.

Payment splitting

Other functionality that’s available in PayCaptain is Payment splitting. This gives the employee the capability to set up automatic payday payments in the app, directly from their net pay. Whilst this is generally used to eliminate the risk of paying bills late - as it can send payments to landlords, credit cards and personal bills directly from net pay - it can also be used to bolster savings or pension pots. For employees without existing savings accounts, accounts can be set up directly within the app to make saving even easier.

Interactive payslips

PayCaptain makes it easy for employees to fully understand their pay. Payslips are graphical and multi-language to make them clearer. There are also help icons which explain deductions like tax, National Insurance contributions and pension contributions. For employees auto enrolled in their company’s pension scheme, the pension payment is broken down to show both employee and employer contributions.

In summary, the Gender Pension gap is an area for concern for women and their employers. Poor pension provision will lead to more financial hardship in later life. It may mean that a woman has to work longer than her male counterpart to have adequate financial provision for her future. It may mean she becomes financially reliant on her partner. It’s therefore essential that employers educate their personnel to help them make better pension provision and give them the tools and support to be able to do so.

To learn more about how PayCaptain can help your business and improve the financial well-being of your employees, please contact us for an informal, no-obligation chat. We’ll be happy to demo PayCaptain for you.