'Substantial' gender pension gap remains within LGPS

The Local Government Pensions Scheme (LGPS) gender pension gap is lower for those still accruing benefits, although a "substantial" pension advantage for men has persisted, a report from the Government Actuary's Department (GAD) has revealed.

The analysis, based on March 2020 data, showed that while women make up around 74 per cent of employees within the LGPS England and Wales actives data, they have lower mean pay and accrued pensions.

In particular, the research identified a 41 per cent pension gender gap for active members, revealing that women actively paying into their pension could expect £3,198 mean total pension, compared to £5,416 for men.

According to the analysis, the male advantage appeared in the mid- to late- twenties, peaking quickly and remaining broadly stable before beginning to narrow around age 60, which GAD suggested may be a reflection of the impact of childcare responsibilities.

The mean gender gap for career average revalued earnings (care) pension was also similar to, but slightly higher than, the mean gender gap for actual pay, which GAD suggested might be caused, for example, by females have shorter service or more career breaks than males.

In addition to this, the mean gender gap for legacy pension was "significantly" higher than the mean gender gap for actual pay, which Gad highlighted as reflection of both the different pension scheme design (final salary) and the different time period (pre 2014 service).

The report also included analysis on pensions already in payment, revealing that while women comprise around 62 per cent of pensioners within the LGPS England and Wales pensioner data, they again have lower pensions than men.

Indeed, the GAD's report estimated a 49.4 per cent gender gap for pensions already in payment, with women receiving a mean pension of £4,285, compared to £8,466 for men.

However, the analysis also found that while the gender pension gap is fairly stable between 50 per cent and 55 per cent at ages above 70, below that age it is lower, at around 45 per cent in the mid 60s and 40 per cent at age 60.

GAD suggested that this may reflect women with lower pension or males with higher pensions working after age 60, or genuine reductions in the gender pension gap for this younger cohort, in which case this trend could continue.

The department is also expected to share a further dataset covering the actives and pensioners and provide further data as the valuation data processing progresses.

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