Women may lose up to £100,000 due to the gender pension difference, since ‘they tend to be penalized.’
In an exclusive conversation with This website, ROMINA SAVOVA, CEO and founder of financial technology start-up PensionBee, discussed the gender pension gap.
Despite having spent the majority of her career in the financial industry, Ms Savova established PensionBee in 2014 after failing to relocate her own pension away from her previous job.
PensionBee has now made its way to the London Stock Exchange, where Ms Savova discussed the crucial problem of child-care duties, which may result in women losing up to £100,000 in their pensions.
“The female salary difference translates into a far larger gender pension discrepancy, which in some areas can be as high as 50%.
“In later years, women have half the pension size that men have because when you invest your wages, you get returns and then invest those returns, compounding interest multiples over time.”
“This implies that, due of the way the investment system works, what could be a 10% gender pay discrepancy in the early years of your career becomes a 50% gender pension gap,” she explained.
“When men and women first enter the workforce, we are normally paid equally; however, over time, a pay gap develops between men and women, which typically occurs around the time women begin having children and taking time off work.”
The quantity of unpaid tasks that women take on when they have a kid, according to Ms Savova, is the reason for this steady loss of pay.
“As a woman, you tend to be penalized not only by your job but also by your family when you have a baby and after you have a baby because women do the majority of the unpaid care work.”
While it may seem surprising that having a child at the outset of a woman’s career may result in her pension being 50% less than her partner’s, this is because all of these factors compound over time.
“While your income potential decreases as you take time from work to care for your children, your partner’s earning potential grows because they continue to gain experience while you are away.”
“And then by the time you return to work, you still have child care responsibilities,” Ms Savova continued, “so women actually work less paid hours and more throughout their lifetimes than men.”Brinkwire Summary News”.