Gender pension gap gradually closing in Ireland
Published: 02:11 PM,Nov 05,2024 | EDITED : 06:11 PM,Nov 05,2024
Among the states in the European Union, Ireland has been one of the leading in matters of equality and diversity. According to a new study, the gender pension gap being experienced by Irish women could be eliminated by 2049.
Currently, Irish women have 31 per cent less than men in their pension pots when they retire. This is for a variety of reasons, including being paid less, and because motherhood usually leaves them with less recorded service during their careers. Women are also typically less likely to make additional contributions to their pension plans, both because they have less spare money than men and have other financial priorities.
The study by The Future Laboratory, which was commissioned by AIR, concludes that, due to policy changes and social shifts, the already closing gender pension gap could be gone by 2049. The gap has fallen from 38 per cent in 2018 to 31 per cent today. This could accelerate due to the introduction of pension auto-enrolment next year, the impact of compulsory reporting on the gender pay gap by companies, as well as economic and demographic shifts, the study finds.
“There’s a lot of doom and gloom around this topic, and a lot of predictions that it could be 70 years before the gap is closed — or perhaps that it would never close,” said Miriam Rayman, fore-sight editor at The Future Laboratory and author of the paper.
“Based on a linear projection of the decrease seen in the data so far which shows the gap is closing, we estimate it will close just before 2050. That’s based on evidence we can see already, and interviews with the experts.”
Rayman said that exciting changes in the workplace such as more women in leadership and demanding equality, plus the effect generative AI is having on diversity in the workplace, is why the study has come down on the more optimistic side of the projection.
Other trends that will have an impact on the speed at which the gender pension gap closes are the expected wealth transfer over the next decade to the Gen X and millennial generations from their “boomer” parents, which should lead to more savvy and long term investment.
The study also says: “Particularly impactful is the planned introduction of pension auto-enrolment next year in Ireland — which will not only bump up female participation but will also raise awareness about the importance of planning for retirement, encouraging women to take steps to close the pension gap and provide for their retirement.”
Ciara Ryan, AIB’s head of wealth, said: “It is promising to know that gender pension parity will likely be achieved in Ireland in the next 25 years. There are several factors that contribute to this, but one that we are very encouraged to see, is that women are expected to take a more active role in managing their financial future, to accelerate pension parity.”
While on the matter of gender equality, it is noted that a new EY report has warned, the UK economy risks jeopardising a £7 billion contribution from female-founded companies unless there is a stronger support for rising women entrepreneurs. The report identified over 240 business founded or led by women with revenues between £20 million and £50m that could grow into so-called ‘super-scalers’ with the right resources and backing.
It found that 45 female-led super-scaler companies — firms with revenues of more than £50m — contributed a combined £7 billion to the UK economy in 2022 and employed more than 55,000 people. Examples include beauty brand Trinny London and recruitment specialist AMS.
But current barriers, such as limited access to funding and entrenched regional and sector imbalances, could stunt the growth of these businesses, it said. Female-founded firms in the UK receive just 2p for every £1 of investment, compared to 14p for mixed-gender founders and 84p for male-only led start-ups.
“Systemic barriers to growth are currently holding back too many potential super-scalers,” said EY’s Lynn Rattigan.
Currently, Irish women have 31 per cent less than men in their pension pots when they retire. This is for a variety of reasons, including being paid less, and because motherhood usually leaves them with less recorded service during their careers. Women are also typically less likely to make additional contributions to their pension plans, both because they have less spare money than men and have other financial priorities.
The study by The Future Laboratory, which was commissioned by AIR, concludes that, due to policy changes and social shifts, the already closing gender pension gap could be gone by 2049. The gap has fallen from 38 per cent in 2018 to 31 per cent today. This could accelerate due to the introduction of pension auto-enrolment next year, the impact of compulsory reporting on the gender pay gap by companies, as well as economic and demographic shifts, the study finds.
“There’s a lot of doom and gloom around this topic, and a lot of predictions that it could be 70 years before the gap is closed — or perhaps that it would never close,” said Miriam Rayman, fore-sight editor at The Future Laboratory and author of the paper.
“Based on a linear projection of the decrease seen in the data so far which shows the gap is closing, we estimate it will close just before 2050. That’s based on evidence we can see already, and interviews with the experts.”
Rayman said that exciting changes in the workplace such as more women in leadership and demanding equality, plus the effect generative AI is having on diversity in the workplace, is why the study has come down on the more optimistic side of the projection.
Other trends that will have an impact on the speed at which the gender pension gap closes are the expected wealth transfer over the next decade to the Gen X and millennial generations from their “boomer” parents, which should lead to more savvy and long term investment.
The study also says: “Particularly impactful is the planned introduction of pension auto-enrolment next year in Ireland — which will not only bump up female participation but will also raise awareness about the importance of planning for retirement, encouraging women to take steps to close the pension gap and provide for their retirement.”
Ciara Ryan, AIB’s head of wealth, said: “It is promising to know that gender pension parity will likely be achieved in Ireland in the next 25 years. There are several factors that contribute to this, but one that we are very encouraged to see, is that women are expected to take a more active role in managing their financial future, to accelerate pension parity.”
While on the matter of gender equality, it is noted that a new EY report has warned, the UK economy risks jeopardising a £7 billion contribution from female-founded companies unless there is a stronger support for rising women entrepreneurs. The report identified over 240 business founded or led by women with revenues between £20 million and £50m that could grow into so-called ‘super-scalers’ with the right resources and backing.
It found that 45 female-led super-scaler companies — firms with revenues of more than £50m — contributed a combined £7 billion to the UK economy in 2022 and employed more than 55,000 people. Examples include beauty brand Trinny London and recruitment specialist AMS.
But current barriers, such as limited access to funding and entrenched regional and sector imbalances, could stunt the growth of these businesses, it said. Female-founded firms in the UK receive just 2p for every £1 of investment, compared to 14p for mixed-gender founders and 84p for male-only led start-ups.
“Systemic barriers to growth are currently holding back too many potential super-scalers,” said EY’s Lynn Rattigan.