The gender pensions gap is equivalent to the average retired woman receiving no pension for the final four months of the year compared with men, the Trades Union Congress (TUC) has warned, as it called on the Pensions Commission to deliver a 'bold plan' to close the divide.

Marking Gender Pensions Gap Day, the TUC highlighted analysis from Prospect showing that the retirement income gap between men and women currently stands at 32.9 per cent, equivalent to around £7,200 a year.

The TUC noted the disparity was more than twice the gender pay gap and meant that, if women received their annual pension income at the same rate as men, they would effectively stop receiving it for the remaining four months of the year.

The union body also warned that the issue was not confined to current retirees, as women approaching retirement have built up, on average, around half the pension wealth of men.

It therefore called on the Pensions Commission, which is expected to publish its final recommendations early next year, to use its review of retirement adequacy, fairness and sustainability to tackle the structural causes of the gender pensions gap.

The TUC argued that unpaid caring responsibilities remain one of the most significant drivers of the disparity, as women are more likely to take time out of paid employment or work part-time to care for children, older people or disabled relatives.

Indeed, one in 10 women aged 30 to 34 is outside paid work because of caring responsibilities, according to the TUC, while women in this age group are 18 times more likely than men to be economically inactive for this reason.

The gender pay gap also contributes to lower employer and employee pension contributions throughout women’s working lives, while women are more likely to work part-time or earn below the £10,000 automatic-enrolment earnings trigger.

The TUC argued that historic differences in state pension entitlement had also contributed to the gap among current pensioners, although these differences have reduced since the introduction of the new state pension in 2016.

Against this backdrop, the union body called for the £10,000 automatic-enrolment earnings trigger to be phased out so all workers can benefit from workplace pension saving, alongside calculating contributions from the first pound of earnings.

It also suggested that employer contributions should no longer be conditional on workers making their own contributions, ensuring that people on low incomes who cannot afford to contribute themselves do not lose their employer pension contribution.

In addition, the TUC reiterated its call for a 'Carer’s Credit' to compensate people, predominantly women, for workplace pension contributions lost while they are outside paid employment because of unpaid caring responsibilities.

Under the proposal, carers would build up additional state pension entitlement on top of the flat-rate new state pension.

The TUC noted that a similar feature existed before 2016, when those caring for children under 12 and registered for child benefit could accrue state second pension credit alongside their basic state pension entitlement.

The union also called for action to address staffing pressures in social care and childcare and for universal, flexible and high-quality childcare, arguing that tackling the unequal distribution of unpaid care was essential to narrowing the gap over the longer term.

The calls follow the Pensions Commission’s interim findings, which the TUC said demonstrated that women, disabled people and black and ethnic minority people faced a considerably greater risk of poor retirement outcomes.

TUC general secretary Paul Nowak said: “Everyone deserves dignity and security in retirement. But right now, too many retired women have been left without enough to get by, often because they spent their working lives raising children and caring for loved ones.

“The workplace pension system needs reform so it works better for people on low pay and part-time workers. And women with caring responsibilities should build up extra State Pension to recognise the value of that work.

“The Pensions Commission's interim report exposed how and why so many women are at risk of poverty in retirement. Now the commission must come up with a bold plan to close the gender pensions gap for good.”

Meanwhile, Prospect senior deputy general secretary, Sue Ferns OBE, welcomed the continued decline in the gender pensions gap but warned that the UK remained “a very long way from achieving parity”, with women receiving £7,200 less a year than men in retirement.

She also raised concerns that gender gaps within some public sector pension schemes were greater than the overall average, stressing that further action would be required to secure equality in both work and retirement.

Women’s Budget Group director, Dr Daniella Jenkins, added that the gender pensions gap should not be viewed simply as a legacy of previous generations, arguing that inequalities in unpaid care and the pensions system continue to affect younger women entering the workforce today.

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