Blog
An inadequate pension system for disabled women
Women have historically been disadvantaged by the pension system in comparison to their male counterparts. Since its inception, it has only placed value on the ‘male working pattern’ of working full-time hours with an uninterrupted working history. However, this is far from the reality of women’s lives, in particular disabled women’s lives.
There’s no recognition of the invaluable contributions made by women to the economy, as the pension system doesn’t consider the high levels of domestic labour and unpaid care, carried out overwhelmingly by women. The current pension system therefore fails to recognise the complex nature of the gender pension gap, the drivers of this, and the impact on disabled women’s lives.
As part of Challenge Poverty Week, it’s an opportune time to think about how a lifetime of gendered inequality in the labour market drives higher levels of female pensioner poverty. This is particularly the case for disabled women who face intersecting inequalities, which means they’re more likely to experience poverty in work and in retirement. This is the second in a series of blogs about the gender pension gap and the differential outcomes for women surrounding inequality and poverty.
The gender pay gap and the long-term cost to women
As our report ‘The Gender Penalty’ details, the drivers of the gender pay gap are complex and interrelated. As the key indicator of gender equality, it represents the divergent experiences of men and women in employment, education, skills acquisition, care, and domestic labour. The structural barriers to women’s equal labour market participation are far-ranging and deep-rooted, such as occupational segregation and the undervaluation of ‘women’s work’, meaning there is no single solution to tackle the gender pay gap and women’s pension inequality.
Our first blog on the gender pension gap, ‘What is the gender pension gap?’ sets out the clear connection between women’s labour market inequality and the gender pension gap. A more nuanced understanding of the drivers of the gender pension gap is needed to understand how this contributes to women’s higher levels of poverty in retirement. There’s a direct link between earning less and saving less that impacts women’s ability to build their pension pot. On average, women have less savings and access to occupational pensions than men. However, due to multiple barriers to participation in the labour market and routes for progression, disabled women and racially minoritised women are more likely to be unemployed, under-employed and experience higher pay gaps. Analysis from TUC reveals that disabled women face the biggest pay gap. The figures show that disabled men are paid £7,144 a year more than disabled women. Research has also shown that the difference in pay between disabled women and non-disabled women varies considerably. This can range from 4.3% to 18.9% depending on the type of impairment.
Disabled women are among the under-pensioned groups who find it more difficult to achieve an adequate income in later life. Racially minoritised women, divorced women, as well as women who have been lone parents at some point in their lives, unpaid carers, and women who are self-employed are also at a greater risk of inequalities associated with lower retirement incomes. The gendered division of care and the likelihood of interrupted working histories, as well as a result of divorce, are major factors in women’s lower lifetime contributions to pensions.
Analysis from Age UK showed that in less than a decade, the proportion of female pensioners in the UK living in poverty had risen by 6%, meaning one woman in every five is now living ‘below the breadline’. This is despite the number of female pensioners falling after the state pension age was increased, which disadvantaged many older women. So, while there are fewer female pensioners, the number of women living in poverty has increased in this time. This signals that the pension system is insufficient as a source of income for women of pensionable age.
Pensions are core to retirement preparation yet most people (58%) are unsure about their likely state pension entitlements and what they will receive. Research from Scottish Widows showed that while both men and women expect to be able to rely on a state pension, there are disparities in their expectations of retirement with 61% of women who have concerns about running out of money in retirement compared to 52% of men.
Research has also found that women who were unaware of the raised state pension age were more likely to experience the news as a shock, exacerbating the negative impact on their mental and physical health with a detrimental impact on women from lower routine and manual social classes in lower quality jobs, leading to worsened health outcomes. This is a particular concern for women, especially disabled women, who are more likely to have inconsistencies in their contribution history, more likely to be low earners, and are unable or unaware how to effectively plan for their retirement. It is also grossly overlooked that the state pension is the greatest source of income for the majority of pensioners and represents a larger part of women’s retirement income than it does for men across all income groups. Yet, it is one of the least generous across OECD countries. In the absence of other sources of income, which disabled women and other under-pensioned groups are less likely to have, this alone is not enough to provide them with an adequate standard of living in their retirement years. Research from Poverty Alliance shows that older women have raised their concerns around pension adequacy, especially as they approach retirement or are in it.
Cost of living crisis, the lasting impact of Covid-19 & women's economic inactivity
The Covid-19 crisis amplified the gendered division of care, whereby women are still providing the majority of informal care for children, older and disabled people. The pandemic has made it more likely that unpaid carers, the majority of whom are women, will experience damaging effects on their pension contributions as they have found it more challenging to maintain employment.
The realities of living through Covid-19 have been different for men and women, and have presented particular barriers for disabled women’s activity within the labour market. The impact Covid-19 has had on employment and poverty has meant disabled women have often had to choose between the risk of losing their job or returning to the workplace and exposing themselves to the virus. Despite being at high risk, many women reported that they felt vulnerable to losing their job if they were unable to work. Moreover, women already in low-paid jobs, who would otherwise have been able to work from home, were not provided with the appropriate equipment or support. Due to their low-paid jobs, some could not afford broadband and this clearly shows the multiple barriers disabled women were facing in the height of the pandemic. Employment was not a route out of poverty, instead, it acted as a barrier to disabled women, placing them at greater risk of the virus and poverty.
Disabled women are at greater risk of financial insecurity as the extra costs to cover their care needs are much more difficult to manage when their income is modest. On average, women have lower levels of savings and wealth compared to men and before Covid-19, women were more likely to be in debt, with disabled women at greatest risk. Covid-19 and the rising cost of living has made this worse, directly impacting retirement savings.
In attempts to manage daily living costs, almost one in six women (16%) said that they have cut back on their retirement savings to manage the rising prices. This is highly problematic for women, older women, disabled women and others facing multiple forms of discrimination who were already disproportionately affected by the rising costs. While the recurrent crises have caused severe financial hardship for many marginalised groups, older women born in the 1950s and 60s, who have had their state pension eligibility delayed, have faced a unique set of challenges during this time as they are also the age group with the highest redundancy rate due to Covid-19. This cohort of women has faced several barriers in seeking employment at the intersection of sexism and ageism. This results in discriminatory recruitment practice with older women’s skills and experience undervalued. As a result, many older women are being forced to accept jobs that place them in a worsened financial situation and are exposed to living in poverty.
Delaying entitlement to the state pension has been a crude mechanism, which has had a strongly gendered impact on women, negatively affecting many older women and their financial, physical, and mental wellbeing. This policy change fails to account for the gendered differences between men’s and women’s lives, particularly in the unequal distribution of care, and the different experiences of disabled women in engaging with the labour market. For some women, as they near their retirement they find they are simply unable to work longer as part of managing their health and therefore cannot accumulate further retirement income. While there have been studies to point to the advantages of working longer, the benefits are only enjoyed when people feel they are not forced to do so.
What needs to change?
Often, we see the gender pension gap being framed exclusively as a problem that women must solve themselves. However, this is futile if we are to seriously address the long-standing structural inequalities that drive the gender pension gap. Placing the burden and blame on women for an ineffective system is entirely misplaced, and there is far more that the Scottish Government, UK Government, and employers should be doing to mitigate the impact on women, and in particular, disabled women.
While there are a range of factors which contribute to the high levels of inequality in retirement, and women’s pensioner poverty, tackling women’s low pay, which includes addressing the undervaluation of the types of work women do, is critical and cannot be overlooked. This persistent undervaluation of women’s contribution to the economy places them at greater risk of poverty, both in their working careers and in retirement. As such, employers need to better support disabled women in the workplace as they face deeper inequalities and are more likely to be living in poverty. This includes providing flexible working, reasonable adjustments, and going beyond to make sure their practice is not discriminatory.
Tackling the gender pension gap and women’s pensioner poverty requires measures that span childcare, women’s working lives, and across pension policy. This includes but is not limited to the UK Government raising more awareness and communicating any changes made to people’s pensions and addressing the gaps in knowledge surrounding people’s entitlements. Moreover, the UK Government should reduce the age requirement from 22 to 18 and remove the lower earnings limit to automatic pension enrolment. This is a key step in tackling poverty in retirement, as it excludes the lowest earners, who are typically women.
Close the Gap has called to replace the shared parental leave scheme with a fairer and less complex system of parental leave. The take-up has remained desperately low and excludes many who are on very low pay and those in insecure work, who again are typically women and particularly disabled women. Employers also have a role to play, as well as the UK Government, to help shift societal attitudes and to make it financially viable for men to take shared parental leave.
As our joint paper ‘A childcare system for all’ highlights, the provision of affordable and accessible childcare is a necessity to women’s gender equality. The Scottish Government should go further to address the pay gap and pension inequality with effective measures around the accessibility and affordability of childcare provision. The high cost of childcare can be prohibitive, and this is a significant financial barrier to women’s wider equality.
Without a gendered response to the current impact of the crises, and understanding the drivers of the gender pension gap, we face the risk of exacerbating women’s pre-existing inequalities within the labour market. This is especially true for disabled women who are subject to multiple layers of discrimination. The pension system is essentially built to produce unequal outcomes for women and men, and this needs to change. Without action, many women, especially disabled women, will continue to face a lifetime of inequality and poverty.
Call for participants: focus groups for disabled women and women with a long-term health condition to share their experiences of employment in Scotland.
There is a significant lack of Scotland-specific data in relation to disabled women’s experiences of employment and engaging with the labour market. Particularly around their access to development, their workplace experiences and disabled women’s pay gaps. These data gaps contribute to policy developments and decisions around the labour market that do not consider the inequalities disabled women face.
Close the Gap is conducting research into disabled women’s experiences of employment in Scotland and is inviting disabled women and women with long-term health conditions to join our focus groups (one online, one in-person) to share their experiences.
The focus of the discussion will be on:
- workplace cultures including areas like access to reasonable adjustments, and workplace discrimination;
- skills including barriers to progression and access to training and development;
- and other workplace priorities identified by participants priority issues around employment.
The findings from these focus groups will be used to inform the next stages of the research project.
The focus groups are for self-identifying women who are disabled or have a long-term health condition. Participants can attend either online or in person:
Register here for Thursday 21st September, between 18:30 and 20:00, online.
Register here for Saturday 23rd September, between 16:00 and 17:30, at the CitizenM Hotel, 60 Renfrew Street, Glasgow, G2 3BW.
Participants will receive a £30 shopping voucher in return for their time. Childcare and travel costs will also be reimbursed, where applicable.
We endeavour to meet all access requirements for participants. Further information on this is available in the registration form.
UK Government changes to flexible working regulations fall short
Flexible work is a key mechanism that can enable women to better balance their working lives with their caring responsibilities. Enabling greater access to good quality flexible work can help organisations close their gender pay gap, and advance gender equality at a national level.
In 2021, the UK Government consulted on the potential extension of flexible working provisions. Last month, the Employment Relations (Flexible Working) Act 2023 was passed. Despite commitments to “make flexible working the default” and to deliver changes that will support families to balance work with caring, the new provisions likely are unlikely to do either.
Why women need flexible work
Women’s disproportionate responsibility for childcare and care and the lack of quality flexible working makes it difficult for them to balance work with family life. The most common form of flexible working, part-time work, is concentrated in low-paid, stereotypically female work, and there is a lack of good quality flexible work across the labour market. Better-paid jobs still tend to be full-time, perpetuating the ‘male-breadwinner’ model, and leaving them out of reach for those with caring roles. This helps to sustain the status quo, where women still do the majority of unpaid care in the home for children, older people and disabled people, which limits their access to well-paid employment, contributing to persistent economic inequality.
What has changed?
The lack of quality flexible working opportunities in the UK labour market sustains women’s concentration in low-paid, low-skilled work and results in women’s under-representation at management level and in senior grades.
The new flexible working act will do little to change this. Employees still only have a right to request flexible working, and employers still able to draw on the same list of broadly-defined ‘business reasons’ to reject requests. Furthermore, while the headline commitment to a day one right to request flexible working has been foregrounded in UK Government announcements, the Act doesn’t actually provide this. Instead, this is to be delivered through secondary legislation. It is expected that this change to the law will be made at the same time as the changes set out in the Act come into force, by July 2024.
Close the Gap welcomes the commitment to the day one right to request, however it is essential that the UK Government sets out a timetable for this to be brought in as soon as possible. Until then, women will still need to have been employed for 26 weeks before being entitled to make a request.
The other changes enacted are:
- extending the number of flexible working requests an employee can make from one to two per year;
- shortening the time employers have to respond to requests from three months to two; and
- requiring employers to consult with the employee on the request before rejecting it, removing the requirement for the employee to set out a business case for their request.
While welcome, these changes do not address the substantive barriers faced by women in accessing quality flexible working, and are unlikely to significantly advance women’s equality in the workplace.
A right to request is not enough
A right to request alone will not deliver the change we need to see to expand the availability and use of flexible working. Indeed, around three in ten requests from employees seeking to access flexible work are turned down by their employer.
The right to request flexible working was extended to all employees in 2014. Prior to this, only employees with dependants under 18 had this right. In 2019, Close the Gap published research examining what type of employee works flexibly and how this has changed over time. This identified that the extension had very little impact on the uptake of flexible working, women’s access to flexible working specifically, and therefore gender equality at work more broadly.
Part-time work continues to be much more likely to be used by female parents than male parents, with little sign of change. This suggests the persistence of gender norms and stereotypes about men’s and women’s roles in mixed sex-households, and at work, which creates barriers to mothers increasing their hours and to fathers reducing their hours. There were increases in the use of home working and flexi-time, which are more equally used by men and women. However, there were also decreases in the use of term-time working and job sharing which is a cause for concern given that these are much more likely to be used by women.
This shows that legal provisions around the right to request flexible working are not fit for purpose, and are not meaningfully progressing women’s equality at work. Instead, we need a step change in workplace culture in order to make flexible working the default.
The change we need to see
The Act is a missed opportunity to tackle the well-evidenced barriers to flexible working. We need to see a requirement for employers to include flexible working in job adverts – in 2022 only 28% of jobs were advertised as flexible. This may make women hesitant to ask about working flexibly in fear that this will deter the employer from offering them the job, or put them off applying altogether.
More needs to be done to enable employers to think creatively about flexible working and job design, who works when, and where. We also need to see wider action to tackle the impact of negative line manager attitudes and cultural resistance to flexible working within many organisations. Too often this dictates whether a request will be rejected or approved, rather than genuine consideration of how flexible working can work for both the employee and the firm. Crucially, there remains no right of appeal for refused requests, leaving employees with nowhere to go if they feel their request has been declined unfairly.
The failure of the UK Government to deliver meaningful change is concerning. The new flexible working act leaves the gendered barriers to flexible working firmly intact, while failing to capitalise on the clear business benefits of enabling families to better balance their work and caring commitments.
The economic fallout of the pandemic is ongoing, and the intensifying cost of living crisis, the burden of which is falling most heavily on women’s shoulders, means the UK Government must go further, not stand still, on tackling gender inequality in the workplace. We urgently need to see a shift in both employment and wider economic policy that reflects the value of women’s work to the labour market and economy as a whole. Without this, economic recovery remains a distant prospect, with women left even further behind.
Equally Safe at Work Community of Practice: Harnessing the power of peer learning to improve employment practice
Last week, Close the Gap held the fourth meeting of the Equally Safe at Work Community of Practice. We had employers from across sectors in Scotland come together to discuss gender equality and violence against women (VAW) in the workplace. In attendance were colleagues from local government, NHS, the third sector, the Scottish Government and COSLA.
The Community of Practice was developed to bring together employers who were working on, or interested in, the Equally Safe at Work accreditation. Peer support and learning have been critical success factors for employers engaged in the programme, and as Equally Safe at Work has expanded, we wanted to look at the role of collaboration in facilitating change. The innovative Community of Practice model aims to test out a new approach of shared learning by bringing together different sizes and types of organisations which are at different stages of their journey on gender equality and VAW. This will also test out whether participation in the group helps to lever improved employment practices on gender equality.
The Community of Practice enables participants to share their experiences of working through the programme, discuss challenges, and foster new approaches to problem-solving and improvement. It also provides an opportunity for employers at the early stages of their work on gender equality and VAW to start building an understanding of what is needed to create meaningful change in their workplace.
In the meetings, participants have reflected on where they are now in their practice, where they want to be and what steps are required to get there. While participants shared frustrations about barriers to progress, they were encouraged to use appreciative inquiry when thinking about their organisational practice. Working towards culture change inevitably focuses on identifying problems and designing solutions. It can be a frustrating process because it can be difficult to see progress at the systems level. That’s why the Community of Practice aimed to create a space where participants could reflect in what has been achieved by identifiying small indicators of change within their organisations.
Several participants shared success stories of VAW now being seen as a workplace issue, with more colleagues discussing it and wanting to take action to address it. Others shared how the programme has helped push open doors, resulting in commitments to address occupational segregation, and new policies being developed on VAW and sexual harassment.
In addition to sharing where progress is being seen, participants have also spoken about challenges around data collection, and securing senior leadership buy in. Others highlighted that gender equality is not seen as a priority, but something that was nice to have but not essential.
We’ll be evaluating the Community of Practice model, along with the other range of activity delivered during this phase of the Equally Safe at Work activity, so that we better understand what works when it comes to improving employment practice. We’ll then be using the learning to design accreditation activity so that Close the Gap can better support employers to take action on gender equality and VAW.
For more information on Equally Safe at Work, you can visit our website. If you would like more information on the Community of Practice and how to get involved, you can contact Kelsey Smith at ksmith@closethegap.org.uk.
A vision for a childcare system that works for everyone.
Close the Gap and One Parent Family Scotland have launched a joint vision for a childcare system that centres women’s equality, prioritises positive outcomes for children, and addresses women’s and children’s poverty. It’s a set of principles for high-quality childcare provision that is flexible, accessible and affordable for all families, including those on low incomes. The principles are endorsed by a broad range of 25 civil society organisations.
Why childcare is important
Women continue to do the bulk of unpaid childcare in Scotland. This combined with the lack of affordable, accessible and flexible childcare works to reinforce women’s socio-economic and labour market inequalities. Research has found mothers are twice as likely as fathers to report the availability of childcare had a “big impact” on their ability to work. Women routinely struggle to balance work with childcare which drives the clustering of women in part-time work. Because part-time work is concentrated in lower paid jobs, this restricts women’s progression opportunities and contributes to the gender pay gap.
Women are more likely to live in poverty, more likely to experience deeper poverty, and find it harder to escape poverty. Single parents, 90% of which are women, disproportionately experience poverty. Young single mothers are at particular risk, with more than half (55%) living in poverty in Scotland. Women’s poverty is inextricably linked with children’s poverty, rendering action to tackle women’s labour market inequalities key to addressing child poverty.
The propensity for women to be primary caregivers shapes their labour market engagement, with the current childcare system often determining whether women have a job, the type of job they have, the hours they can work and how much pay they get. This has a particularly profound impact on single parents.
Moreover, for many families the high cost of childcare is a significant barrier to financial stability, and means childcare is becoming increasingly unaffordable. Three-fifths of parents have reported difficulties affording childcare, with single parents and parents of children with additional support needs being more likely to report difficulties. High childcare costs are particularly problematic for single parents, as it restricts their labour market participation, drives their higher rate of poverty and leads to more debt accumulation.
Problems with the current system
Close the Gap has welcomed the expansion of the funded entitlement to 1140 hours, but it should be seen as the starting point of reform, rather than the end. 1140 hours of childcare only equates to the school day and is delivered on a term-time basis. It therefore doesn’t enable women to work full-time if they need to or want to. Research from the Scottish Women’s Budget Group highlights this inflexibility, with two-thirds of women reporting the delivery of these hours don’t cover their childcare requirements due to its lack of flexibility. The inflexibility of the current childcare system is a particular issue for single parents and those who work atypical hours and shift work, who face greater challenges in finding childcare that suits their needs and may struggle to arrange childcare on short notice. Furthermore, the rigidity of childcare provision combined with the inflexibility of the labour market further compounds inequalities caused by the current system. This, in turn, places additional financial pressure on women, and prevents many women from accessing employment, training or education.
Additionally, the current expansion has not reduced the need for parents to purchase expensive, top-up childcare. The high cost of childcare is particularly challenging for parents of disabled children, as they face higher than average childcare costs. These above average costs can act as a barrier for employment and also contributes to higher poverty rates amongst families with a disabled member. Three-quarters of parents and carers of disabled children have had to reduce their hours or leave their job entirely due to difficulties in accessing appropriate childcare, which further exacerbates their experiences of poverty.
Women’s experiences of managing childcare is shaped by the multiple intersecting inequalities they face. However, there is a significant lack of intersectional data on how the current childcare system is meeting the needs of different groups of women such as disabled women and racially minoritised women. Research by Close the Gap found that accessing affordable, appropriate childcare was identified as a significant barrier for many racially minoritised women, and a particular challenge for some migrant women. For migrant women, the absence of informal networks of family or friends close by to help with childcare increased the burden of childcare, limiting their ability to enter the workforce or increase their working hours. There is a significant need for more granular data to better understand women’s diverse experiences to ensure that services are designed to meet the needs of their family.
Childcare work is significantly undervalued in Scotland’s economy which results in the low pay which characterises the overwhelmingly female-dominated sector. The undervaluation of childcare is driven by stereotypes around gender roles and assumptions about men’s and women’s skills, capabilities and interests. Women are seen as ‘natural’ carers, and therefore better suited to caring professions. These factors contribute to the undervaluing of the skills needed to do childcare work.
The undervaluation of childcare work and the sector-wide low pay has created workforce recruitment and retention challenges, which in turn impact the quality of childcare services. Action to improve the pay, and terms and conditions of the childcare workforce would have a significant positive impact on gender equality, as women make up 96% of workers. Increasing pay would also act as an economic imperative for more men to enter childcare, which would reduce the acute levels of occupational segregation which characterise the sector.
Finally, childcare is not recognised as critical social infrastructure. Within mainstream economics, spending on childcare and social care is categorised as current consumption, rather than capital investment. Unpaid care is not recognised at all. Despite evidence from Scotland and internationally highlighting investment in care infrastructure stimulating job creation, community regeneration and employment opportunities for women, it is still overlooked in Scottish policy making. Recognising childcare as social infrastructure is key to creating a wellbeing economy, and is an important enabler of paid work and women’s socio-economic equality. Reframing how childcare is seen in the economy is also essential to ensure there is sufficient investment and policy focus to addresses the undervaluation of the workforce and deliver high-quality services that meet the needs of women and their families.
Principles for a childcare system
The principles created by Close the Gap and One Parent Families Scotland are intended to shape the next stages of Scotland’s childcare offer. These principles should underpin a system that promotes women’s socio-economic and labour market equality, advances children’s rights, and addresses child poverty. The principles are:
- A system of childcare that puts choice for all families at the heart of provision.
- A universal funded entitlement of 50 hours per week for children aged 6 months and above that is free at the point of use for all families.
- A high-quality service which delivers positive outcomes for children and realises children’s rights.
- A diverse and skilled childcare workforce that is valued, fairly paid and gender balanced.
- Flexible delivery that enables families to access childcare when they need and want it.
- Investment in childcare should be considered as necessary infrastructure for a sustainable wellbeing economy and good society.
- Work towards a childcare system that is not based on profit making.
- Investing in childcare is good for the economy.
You can read the report here A childcare system for all: A vision that puts gender equality at the centre of Scotland’s childcare strategy.
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