More women than ever face old age in poverty after a report this week revealed that they were sacrificing their pensions to accommodate the rising cost of childcare.
The Fawcett Society, which campaigns against gender inequality, found that women were significantly under-saving and worryingly, many were relying on their male counterparts to make up for the shortfall.
The charity said women were taking a significant hit to their pension when they had children, but many were unaware of the long-term financial consequences of taking on full responsibility for childcare costs.
The concern is fuelled by the fact that women also live longer and are still victims of income inequality as well as inequalities in the pensions system, which serves working men more than it does working women.
The report found that only 52 per cent of women aged over 30 and earning more than £10,000 were saving adequately for old age compared to 60 per cent of men. And 25 per cent of women said they had no retirement savings, compared to just 15 per cent of men.
Women said they felt it was their responsibility to fully pay for childcare costs and to manage these costs alone, but to make it affordable they sacrificed pension contributions or even stopped working, resulting in a large career break where no financial contribution is made towards retirement.
Between 2010 and 2015, childcare costs shot up by an inflation-busting 33 per cent and although 2016 has seen a slowdown, with costs rising just above inflation, many still struggle financially when it comes to footing the bill, which runs into hundreds of pounds per week.
The Fawcett Society found that women generally lacked financial confidence, undermining their financial independence and decision-making. It also discovered that women saw maths and pensions as male space, which they found confusing, resulting in lack of engagement when planning for old age.
Although automatic enrolment could see women placed into pension schemes, payments will not be enough to accommodate living costs in retirement.
The Fawcett Society said both parents should pay for the cost of childcare and fathers should pay into their partner’s pension if they are forced to stop working to care for a family. A woman should not be the only partner reducing or ceasing her pension payments to pay for childcare.
It also proposed that student loan repayments or childcare voucher payments default to pension payments once they are no longer needed. And the charity called on employers and the pensions industry to write to women who are about to go on maternity leave, educating them about the financial consequences of reducing or stopping pension contributions, so that women can make an informed decision.
Women spoken to by the Fawcett Society said they had no idea of the impact maternity leave or reduced hours had on pensions and that such communication could make a significant difference.
Kalpana Fitzpatrick is a freelance personal finance and consumer affairs journalist and broadcaster