Women who get divorced, take extended maternity or time out of the labor force as caregivers face a higher risk of poverty in old age, Insurance Ireland has warned.
he group has called for a reform of pension and tax law to make sure women’s pension pots – which are an estimated one-third to one-half the size of men’s – don’t shrink even further.
The Government is preparing to roll out a new auto enrollment retirement scheme, while a major EU pension reform is due to come into force fully next January.
Insurance Ireland chief executive Moyagh Murdock said the auto enrollment scheme has no provisions for extended maternity or parental leave.
“Current tax credits for time out of the workforce do not cover all situations of caregiving experienced by women – they are rigidly defined, and these should be reviewed and gender-proofed.
“Consideration should be given to providing additional support for women – specifically around the provision of pension tax credit and shared tax-relieved pension contributions. “It will be a missed opportunity if these obvious shortcomings are not addressed at the pre-legislative stage.”
Insurance Ireland also warned the EU reform of pension providers could nullify pension adjustment orders, which award former spouses a proportion of their ex-partner’s pension pots in a divorce.
“Unless the legislation is amended as a matter of urgency, this may result in thousands of women being left facing poverty in retirement,” Insurance Ireland said in a statement.
A survey by the Competition and Consumer Protection Commission (CCPC), published today, found that 29pc of women have no pensions, investment income or savings in place, compared to 22pc of men.
Women (18pc) are also much less likely than men (29pc) to expect to use income from a rental property in retirement.
A survey by Standard Life earlier this year found that the average pension pot for women is €89,000 – half that of men, who expect to draw down €170,000.
Research by the Economic and Social Research Institute (ESRI) from 2019 puts the pension gap – the difference between male and female pension pay-outs – at 35pc, with retired men getting €150 per week more than women.
The CCPC survey shows that 38pc of all adults do not have a pension, including 23pc of people aged 55-64.
Two-thirds of people (66pc) expect to help fund their retirement via the state contributory pension, which is currently just €253 per week.
CCPC member Kevin O’Brien said the reach suggests “a lack of provision for adequate retirement income” among a large group of people, and fuels concerns about consumers’ “long-term financial well-being”.