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The gender pay gap and the gender pension gap.

How the gender pension gap is changing

The gender pay gap is also a gender pension gap. EU women older than 65 get a pension on average 29% lower than that of men. The good news is that the gap has been decreasing and is almost 5 percentage points lower compared with 2010 (34%), the latest Eurostat numbers (2019) shows. A new report from UK’s Trade Union Congress (TUC) says women in the UK have to get by in retirement on significantly lower incomes than men. Among today’s pensioners women have annual incomes 40.5% lower than men, the TUC report says while EU statistics show average gender pay gap in 2021 of 12.7%. 

Eurostat says that although women received lower pensions in all EU Member States, the extent of the gap varies widely..The largest difference was in Luxembourg, where women aged over 65 received 44% less pension than men. Luxembourg was closely followed by Malta and the Netherlands (both 40%), Cyprus (39%), Austria (37%) and Germany (36%).

“On the other hand, the smallest difference in pension income between women and men was recorded in Estonia (2%), followed by Denmark (7%), Hungary (10%), Slovakia (11%) and Czechia (13%).”

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The TUC report says the gender pensions gap in the UK shows no sign of shrinking any time soon. It has remained stable over the five years research firm Prospect has been calculating it, and this year’s figure is actually slightly higher than the average gap of 39.6% over this period.

“Looking forward, differences in incomes from the state pension have shrunk in recent years and will continue to narrow, although state pensions are not projected to be equal for men and women reaching retirement until 2041.”

“But there are still extreme differences in the value of pensions built up by men and women below state pension age in their workplace pensions”, TUC says.

On average UK women in their early 60s will have built up just a third of the pension wealth as men. 

Although the pensions wealth gap generally increases as people get older, women have lower levels of pension wealth in every age bracket.

TUC says analysis has revealed that these differences persist across all industries, with the largest disparities in percentage terms in manufacturing, wholesale and retail, and other service activities, where women typically have less than a fifth of the pension wealth of men. 

“These large disparities in pension wealth among the working age population show that, without significant policy changes, the retirement income gap will persist for future pensioners”, the TUC report says. 

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Compared with 2010, the EU gender pension gap has decreased in the majority of EU Member States. The most noticeable decreases were recorded in Greece (from 37% in 2010 to 24% in 2019, or -13 pp), Denmark and Slovenia (both -11 pp) and Bulgaria (-10 pp).

In contrast, the latest numbers show gender pension gap increased in 6 EU Member States since 2010. The most significant increase was observed in Malta (from 22% in 2010 to 40% in 2019, or +18 pp), followed by Latvia (+6 pp), Lithuania and Slovakia (both +3 pp) as well as Croatia and Italy (both +2 pp).

In 2019 (latest data available),, the proportion of pensioners aged over 65 at risk of poverty in the EU stood at 15.1%, slightly above the figure of 14.5% in 2018 as well as above the risk of poverty of working age population (16 to 64 years) at 14.2%. 

“Unlike the gender pension gap, at-risk-of-poverty rate for pensioners has been rising gradually since 2014, when it stood at 12.3%”, Eurostat says..

Across the EU as a whole between 2010 and 2019, the proportion of female pensioners aged over 65 who were at risk of poverty was around 3 to 4 percentage points (pp) higher than the rate for male pensioners.

In 2019, the proportion of pensioners aged over 65 who are deemed to be at risk of poverty was between 10% and 30% in the majority of EU Member States. The four countries with an at-risk-of-poverty rate above 30% in 2019 were Latvia (54%), Estonia (51%), Bulgaria (36%) and Lithuania (35%).

In contrast, the lowest rates in 2019 were recorded in Luxembourg (7%), Slovakia, France, Denmark (all 9%) and Greece (10%).

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