The pensions gender gap

Ryan Tubridy, who presents the Late Late Show, earns €495,000 while his female colleague Claire Byrne earns less than half that, at €201,500
Gareth McKeown

AS you may remember, we recently looked at a report from the pensions company Aegon which highlighted the pensions saving gap between men and women.

It revealed that by age 50, women have on average saved half as much as men into their pension: just £56,000 compared to £112,000 for their male colleagues.

Well, now there have been some studies done down south, that show this is not just an exclusively UK or Northern Ireland problem, it goes right across the board.

So I thought this week we would ‘break for the border' and see how the situation has developed to the south of here.

The first piece of research, by Standard Life, finds that women in the Republic are much less likely to have a pension in the first place, with just over one in three women (36 per cent) owning a pension, compared to over half (55 per cent) of men.

Employment patterns also mitigate against women being high earners, which reduces the amount they can save, says a similar report just published by Aviva. Although women make up nearly half of the Republic's workforce (46 per cent), they are more likely to have lower pay, because they account for 70 per cent of part-time workers.

As a result, over a third of women worry that they won't have a decent standard of living in retirement, compared with just one in four men. The average woman would like to retire on €600 a week, but (even including the state pension of €239), most are heading for just half of that amount.

Another aspect of the problem is good honest lack of information. The vast majority of women (71 per cent) have not informed themselves about how to start a personal pension, and say they would not know how to go about it. A planned auto-enrolment pension system, which would do it for them, is not planned down south until at least 2021.

Well, no issue gets as much publicity as when familiar stars of stage and screen are affected. The gender pay gap in society was highlighted lately when two high-profile media presenters from among RTÉ's highest earners allowed their salaries to be revealed.

Ryan Tubridy, who presents the Late Late Show, earns €495,000 while his female colleague Claire Byrne earns less than half that, at €201,500.

Again, this appears to be a universal phenomenon in the media business throughout these islands - a similar gender pay gap came to light lately in London at the BBC.

Now obviously, both Ryan and Claire are high earners, and probably have pensions to match. But the point is that this gender pay gap applies to almost all ‘normal' earners in the workforce, and again shows why women tend not to have a pension, or do not save enough.

Claire's situation also showed up the so-called motherhood penalty, as she had just returned from time off in what she called ‘the baby bubble' – a career break after having her third child.

Of course, for most ‘ordinary' mums, maternity leave can turn into a career break of five years or more, and even after that, the return to work is often into a part-time job.

The television company has said they are conducting a review of the levels of women's pay, but there is little evidence that this is happening down on the street, in the civil service, the factories, and the corner shops. Claire Byrne agreed that ‘gender pay is an issue not just in RTÉ'.

With all these factors mitigating against women making adequate provision for retirement, it is no surprise that Irish women are more likely to be trapped in the workplace: they are five times more likely to have to continue working full-time after retirement age (5 per cent of women versus 1 per cent of men, says Aviva).

All of this is hardly a surprise. But it shows that the challenges women face in building a decent retirement income – whether using your ‘sterling purse' or your ‘euro purse' – are universal right across the UK and Ireland.

One easy way to take steps now is to talk to a pensions specialist about setting up a personal pension.

And it's particularly important for those of us who are not high earners.

:: Michael Kennedy is an independent financial adviser and pensions specialist, and can be contacted on 028 71886005 . Further information can be found on the Facebook page 'Kennedy Independent Financial Advice Ltd'

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