Taking steps towards fairer retirement benefits for all

The recent change to PLSA Retirement Living Standards has seen the amount of income required to achieve the minimum standard of living in retirement increase to £14,400 per year and £31,300 per year for those who want a moderate standard of living.

At Royal London, we want to help colleagues achieve the standard of living in retirement that's right for them. We therefore offer a generous pension plan with double-matched contributions up to 14%. So if a colleague contributes 7% to their workplace pension, we contribute another 14%. If they contribute 5%, we contribute 10%. Although the latter is still substantial, it does mean they're missing out on 4% of their salary being added to their pension plan. Over time, this loss can really add up.

What causes the gender pension gap?

Throughout my career, I've spoken to many colleagues who've taken time off work, or reduced their working hours, for various reasons including raising children or caring for family members. It's mostly been women, who even now are more likely to take on caring duties. One thing that remains consistent is that very few consider the effect on their pension.

Many don't realise that, because of all or some of these factors, they're likely to be paying less into their pension than male counterparts. Our recent report, Tackling the gender pension and wealth gap, highlighted women contribute on average £1,805 (31%) less than men each year – often missing out on crucial employer contributions. This has contributed to what has become known as the gender pension gap.

What is Royal London doing to help close the gap?

As Pensions Manager at Royal London, I'm dedicated to highlighting the true value of our workplace pension and helping colleagues maximise this benefit. This includes providing guidance for both women and men at different stages of life. Why men as well as women? I believe the gender pension gap should be viewed as a family finance planning issue and is therefore a concern for both genders.

Flexible working options

We offer flexible working options, for example working from home, compressed hours or part-time work. This ensures working parents can balance family commitments without significantly reducing their working hours. It also means colleagues approaching retirement can transition gradually. This gives colleagues the opportunity to maximise their earning potential and take advantage of Royal London's employer pension contributions, which in turn allows them to boost their pension savings until retirement.

Shared parental leave

We offer up to 50 weeks of paid shared parental leave in a child's first year, promoting equal childcare responsibilities between genders. Plus, colleagues caring for both children and elderly or ill family members can take up to two weeks of carer's leave per year, on full pay. During this time, they can still benefit from our matching pension contributions, income protection, and life insurance policy.

Raising awareness

We run regular pension webinars to encourage employees to really engage with their pension and make sure they're getting the most from it. And of course, we continue to raise awareness of the gender pension gap through these webinars, which includes highlighting the implications of reducing working hours or leaving work entirely, and what they can do themselves to close the gap.

Many assume the only route is to increase their regular pension contributions. But other options include bonus exchange, which can help top up pension savings while making the most of tax benefits, plus wider tax advantages, for example married couples tax allowance.

There's also the option to pay up to £3,600 each year into a pension and receive 20% tax relief even if no income is received in that tax year. This means someone in paid employment can finance contributions for a partner on a break from employment, reducing any gaps in their pension. Such contribution costs £2,880 as the government automatically adds £720.

Our webinars highlight the support available in our financial wellbeing service which plays a pivotal role by supporting colleagues in improving their overall financial health today, so that they can reap the rewards in future.

After attending each webinar, our colleagues have the option to arrange free one-to-one guidance sessions with a financial adviser.

Menopause support

Although it may seem unrelated, we also provide support for women experiencing menopause symptoms. We aim to empower them to continue their careers during this stage in their lives, rather than reducing their working hours or leaving the workforce completely, which in turn reduces or even stops their pension contributions. By offering access to healthcare professionals, including GPs and mental health support, we can provide necessary adjustments and eliminate the need for unpaid leave.

Education and support

At Royal London, we strive to ensure all colleagues have the information, resources, and support necessary to make the most of their workplace pension, so that they have enough income to fully enjoy their life in retirement.

Read our full report Tackling the gender pension and wealth gap.