More must be done to ensure women choosing between full and part-time work are made aware of the potential impact on their pensions

Part-time female workers in their forties and fifties could benefit from information from pension companies explaining what the impact of working either a day or two extra a week would have on their pension savings, according to latest research.

Findings contained within the New Choices, Big Decisions study1, which was commissioned by leading workplace pension scheme The People’s Pension2 and asset manager State Street Global Advisors3, provides further evidence of the impact of the gender pensions gap4. Responsibilities, such as looking after children, meant some of the women interviewed for the study had reduced their working hours early in their careers, and retained this work pattern after their circumstances changed enough for them to consider increasing their hours.  Of those interviewed, women were more likely than men to be in part-time work both at retirement and in the lead up to it.

The report recommends that the workplace pension industry should explore the possibility of getting information to women who work part-time, in their mid-40s and beyond, setting out the ramifications of not having up to an extra two days a week of work on the size of their pension pot.

Calculations by The People’s Pension reveal that a woman who chose to return to full-time work aged 42 after 14 years of working part-time could be as much as £1,224 a year better off in retirement than a woman who stopped working at 28 and continued part-time hours throughout her career6. The new state pension will provide £9,110 a year in retirement.

Phil Brown, the director of policy and external affairs at B&CE, the provider of The People’s Pension, said: “This latest research is further evidence of just how stark the gender pensions gap is. The New Choices, Big Decisions study has given us genuine insight about how people save and plan for their retirement and there are sobering examples of women who now regret that they didn’t fully consider what impact that sustained periods of working part-time would have on them in retirement.

“We in the pensions industry could look to do more to see how women might receive information about how to increase what they save.”

“But it’s important to recognise that the gender pensions gap cannot be bridged by individuals acting alone, even if they get more information from the pensions industry, as it requires the Government to do more to enable women to return to their roles or work more hours once they have children. One of the main ways of doing this would be the provision of better, more affordable childcare.”