Equal Pay Day highlights pension gap too

Equal Pay Day in the UK fell on 18th November this year. The day, calculated by charity the Fawcett Society, marks the day in the year when women, on average, stop earning relative to men because of the gender pay gap.

The gender pay gap is the difference between the average pay of men and women within a particular group or population.

To calculate the Equal Pay Day, Fawcett uses the mean, full-time, hourly gender pay gap for the UK, which this year is 11.9%, an increase from 10.6% last year.

The ONS Gender Pay Gap in the UK 2021 data shows an increase in the gender pay gap for women, with younger women facing a rising gender pay gap.

Felicia Willow, Interim CEO of the Fawcett Society, said:

“The covid pandemic has made collecting the gender pay gap data difficult and is likely to have had an impact on inequality in the labour market itself. We will need to wait until furlough, data collection and other issues have ended before we can be certain of what has happened.

“Our recent research has shown the severe impacts of the pandemic on younger women particularly, both on the sectors they work in and on their mental health. Today’s data suggest the pay gap for them may be rising, and that action is needed to stop this turning into a long-term increase in the gender pay gap.

“Whilst gender pay gap reporting has been effective in getting big employers to act, it needs to go much further – we want to see Government requiring mandatory action plans from employers to tackle gender pay gap in the workforce, as well as sharing data.The pandemic has had a tough and disproportionate impact on women, in particular women of colour, disabled women and mothers. And now in addition to this, a widening gender pay gap paints a worrying picture. The Government needs to take bold action, from improving childcare provision, making flexible working available to everyone, and tackling the rising cost of living.”

Jackie Leiper, Managing Director of Workplace Savings at Scottish Widows, said:

“The unfairness doesn’t stop there [with Equal Pay Day] though as, by the time they reach retirement age, the pay gap has become a savings chasm. Our Women & Retirement Report released earlier this week shows that even if we closed the gender saving gap completely, pension equality would still not be achieved. That’s because young women today need to save an average of £100,000 over their working lives to bridge the savings gap. They’d then need to put aside a further £85,000 to cover longer life expectancy and pay for social care.

“There are ways to help level the playing field – from enhancing maternity pensions to offering better parental leave and financial support for childcare – so that women are no longer financially penalised for raising a family. Of course, we must also tackle the larger structural issues in our society, like the gender pay gap.

“Pension inequality is not just an issue for women to resolve, structural unfairness affects us all and needs the collective efforts of everyone to resolve this persistent imbalance.”