The COVID-19 crisis has left around 400,000 single mothers locked out of workplace pension saving, research suggests.
Research from provider Now: Pensions and the Pensions Policy Institute (PPI) found 43% of single mothers aren’t reaching the minimum earnings threshold for automatic enrolment into a workplace pension – a rise of 100,000 women since the pandemic began.
Reasons for this include more single mothers being forced to work part-time, lower levels of pay, and greater demands on their income, according to the researchers.
Samantha Gould, a spokesperson for Now: Pensions, told Sky News she felt “angry and upset” about the data, but admitted that “it wasn’t a surprise”.
She said: “The last year has shown that women have taken the brunt in terms of feeling the effects of the pandemic, with school closures and childcare costs rising. As a single parent myself, you’re the sole earner and sole carer.”
Ms Gould said single mums were forced into “making that decision between having to work or look after their children” and that “they’ve had no choice but to stop working or reduce their hours”.
The situation has “excluded them from a workplace pension”, she added.
Now: Pensions is calling on the government to remove the £10,000 annual earnings threshold, which automatically enrols employees into a pension plan.
On average, single mothers in part-time work earn £6,922.
Gingerbread, a charity for single parents, has reported that 49% of single parents have taken on more debt since COVID began, pushing later-life saving further down people’s priorities.
Before schools reopened, single mother Gemma, 35, was working full-time while home-schooling her 15-year-old daughter in lockdown.
She had to temporarily stop her pension contributions when she split with her partner five years ago and said her finances “just don’t allow” her to resume a plan.
“There isn’t enough money left at the end of the month to be able to put into a pension plan, with all my money going to things like food, heating and electricity bills,” she said.
“I’ve done a full-time 9-5 job alongside home-schooling, which has been really difficult at times, I’ve not reduced my hours or anything, and doing them both at the same time in the same place, has taken a financial and emotional toll.
“At the moment, I’m living for the day rather than thinking of the future because I need to be able to live day-to-day.”
In response to the research, a Department for Work and Pensions spokesman said: “Our ground-breaking pension reforms, including automatic enrolment, have helped millions of more women save into a pension, many for the first time, and current contribution rates have been phased in to balance bringing people into saving in a way that’s affordable for both savers and employers.”
But unions say government cuts to public service pension schemes have “gone too far”, as another report found that reforms have led to employees contributing “substantially more” to their pensions.
The National Audit Office (NAO) said total payments from the four largest public service pension schemes, covering the armed forces, civil service, NHS and teachers, have doubled in real terms over the last 20 years – to £33.5bn.
Male scheme members receive £14,100 on average annually, compared with £7,750 for women (a 45% difference), said the NAO, adding that men earn more over their careers and so build up a higher pension.
Kevin Courtney, joint general secretary of the National Education Union, said: “It is clear that the government’s cuts to public service schemes have gone too far.
“There is no justification for further politically motivated attacks on public service pensions.”