The impact of the gender pay gap on post-retirement earnings

Abstract

This article examines the factors affecting women's earnings during their working years that go on to affect their earnings in retirement. In particular, it argues that factors relating to part-time working, career patterns and types of occupation and employment contribute not only to keeping women's income lower than men's during their working life, but also to a reduced entitlement to benefits from occupational pension schemes after retirement. When the effects of women's greater longevity are also taken into account, a picture emerges of an increasing number of women facing poverty either in old age or in extreme old age. Using data from the Labour Force Survey, the variations in pay between men and women are analysed, providing results which in turn help to explain the differences in post-retirement income. It is argued that occupational pension schemes, most of which were constructed with the needs of the long-serving male breadwinner in mind, could be made more appropriate to the very different needs of female employees in a much more mobile and flexible pattern of employment.