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Retirement: Women at risk of poverty

  • 07/06/2017
  • Author:bridgetmccall

Irish women typically retire on incomes that are 30% plus lower than their male counterparts.

Older woman

Irish women typically retire on incomes that are 30% plus lower than their male counterparts, a new report published by the human resource consulting firm Mercer reveals.

The company is asking governments, policy-makers and employers to respond to the “urgent challenge” the pensions gap poses.

According to the report, half of European Union states, including Ireland, have pension gaps of 30% or more, while the EU average is 40%.

The difference between what a woman and a man will earn while in paid employment (gender pay gap) is considerably lower, at 16% across the EU and 15% in Ireland.

Causes of the pension gender gap

Quoted in the Irish Time, Mairéad O’Mahony, head of DC and financial wellness at Mercer Ireland, said:

“Women face a triple bind of lower earnings, more gaps in service and longer life expectancy – all of these factors mean that women have to draw from a smaller pool of assets for a longer period of time in retirement,”

The structure of pensions is also a factor. Most Irish pensions systems are income-linked, meaning those earning less, working part-time or taking career breaks to care for children or older family members build up less pension.

Ms O'Mahony said: “Most retirement plans are designed for a 40-year-long, continuous, full-time career with few breaks, and do not reflect women’s divergent needs. Companies should review their benefits plans and communications through a gender lens to ensure they address the specific issues and needs of the female workforce."

An unwillingness to take financial risks (risk aversion) is also an important issue.

“The root causes behind women’s risk aversion and lack of financial confidence are multi-dimensional and complex, but action-orientated financial education should be at the heart of the solution,” said Ms O’Mahony

Sources: Irish Times article: Women at risk of poverty in retirement

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Useful organisations

Age Action: Provides information and other services to older people in Ireland.

Citizens Ireland information on income supports for older people

Money Advice and Budgeting Service (MABS): Helping anyone who is in debt.

 

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