Women may not be able to afford basics like food and heating when they retire, thanks to the ‘motherhood penalty’ and the gender pensions gap. What can we do to change things?
The ‘motherhood penalty’ has a deep and enduring impact on women’s later lives, with 75% of single mothers facing living in poverty, struggling to heat their homes and buy food when they retire.
Women who permanently move to part-time work at age 30 can lose women £47,000 in their pension pot, according to Scottish Widows’ Women & Retirement Report 2023.
The gender pension gap – the different in pension savings between men and women at retirement age – is more than double the size of the pay gap, at 39% compared to 15%.
A lack of affordable childcare is one key cause of the gap. When women cannot work, they cannot save money into their pension.
More than a third of mothers (37%) leave jobs to look after their children, 48% say that having children slowed their career progression and 51% of single mothers struggle to find a job at all.
Alesha De-Freitas, head of policy, advocacy and research at the Fawcett Society, said: “The findings of this report underscore the stark reality of the inequalities that disadvantage women throughout their lives. The government needs to make urgent changes to rebalance the drastic inequality that will see 75% of single mothers plunged into poverty when they reach retirement age.”
Jackie Lieper, managing director of Scottish Widows added: “We must recognise the amount of childcare responsibility that falls on single mothers and their huge contribution to society which means they should be protected by policies to limit the impact it has on their careers and pensions. The government needs to prioritise affordable childcare to improve the retirement prospects for all mothers and single mothers in particular.”
While there is plenty of work to be done, there is some light at the end of the tunnel, the report says. Women may still do more childcare than men, but this is slowly changing; today’s parents split it more equally than previous generations did.
Policy interventions may also have helped. “Young women report being much more likely to be saving by age 25 than men of the same age or older generations,” noted Lieper in the introduction to the report. “This can only be a step forward in improving the future retirement outcomes of women.”
