Martin Lewis lays out the two types of pensions
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Workplace inequality can take many different shapes, from unequal pay and promotion disparity to racism and sexual harassment. It can also take additional forms, such as fewer opportunities and benefits offered to women. A new survey carried out by law firm Boodle Hatfield found men are more likely to be offered shares in the company they work for than females.
Analysis by the law firm of more than 30,000 instances when tax-advantaged share options were offered, showed 69 percent went to men and only 31 percent to women.
Meanwhile, a study of more than 14,000 tax-advantaged share options that had been taken up showed men accounted for 70 percent of these, with women accounting for just 30 percent.
While many women are already contending with the stark gender pay and pensions gap, this concerning data doesn’t paint a particularly good picture of the workplace equality landscape that many companies are said to be “improving”.
Florence Codjoe at money.co.uk said: “Research consistently shows there is a discrepancy in the amounts men and women can earn and save over the course of their careers, and the news men are more likely to be offered shares in the company they work for than females only compounds the issue.
“Systemic failures to protect female workers are to blame for the gender pay gap while other critical factors include a shortage of women hired into senior positions, lack of career progression following maternity leave and the high number of women in low-paid or part-time careers.
“Government action to address the issue is needed, but in the meantime, women must plan ahead and take action to bridge the gap.”
Women are currently facing a large gender pension gap. Research from Pensions Profiles has found in some regions of the UK, the gap can be as wide as 50 percent.
This is typically due to men often earning more than women. Until the Government intervenes, there are methods female workers can carry out to tackle this.
Experts at money.co.uk have put together some top tips to help female workers narrow the divide.
Plan better for life after work
If you haven’t already, enrol in a workplace pension.
Ms Codjoe said: “Even if you earn under the auto-enrolment threshold of £10,000 a year, you can still ask to join the company scheme.
“If you earn over £6,240 a year, you’ll get company contributions (free money from your employer) and if you earn less, you’ll still get the benefit of tax relief (free money from the Government).”
If you’re already enrolled, look to maximise the amount you receive from your employers by boosting your own pension contributions.
Ms Codjoe said: “Many employers offer ‘matching’, which means they’ll contribute extra money if you do – with some double whatever you pay in.
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“Even if your company doesn’t ‘match’, it’s worth boosting your contributions, as you’ll get a handy tax relief boost.”
Open a private pension
If you don’t have a workplace pension to contribute to, open a private one and save earnings into this instead.
Ms Codjoe said: “There are no company contributions, but you’ll still get tax relief. Remember that the earlier you start saving, the more effective this will be, due to the power of compound interest.”
National Insurance credits
Earn back more cash by claiming National Insurance credits if you’re currently out of work due to pregnancy, childcare, or other caring responsibilities.
Ms Codjoe said: “Many benefits, including child benefits, automatically give you NI credits.
“Many women don’t sign up for child benefit because when their partner earns over the £50,000 limit, they have to start paying it back.
“But you can claim the benefit and tick a box that says you won’t receive the money, which cuts down on admin and protects your NI record and state pension.”
Stay on track for the full state pension
Another key tip is to make sure you’re on track to receive the full state pension.
You need 35 years of National Insurance contributions to receive the full amount, but you can buy additional years if you’re lacking.
Ms Codjoe said: “Don’t buy extra if you have enough working years left to receive the contributions you need.”
Tax relief is important
When you earn tax relief on your pension, it means a portion of the money you would have paid in tax on your earnings will go directly into your pension pot instead of to the Government.
Ms Codjoe said: “Make sure you’re getting all the tax relief you’ve earned by saving into a pension. If you’re self-employed, you can claim the relief through self-assessment.”
Most employees will receive tax relief worth between 20 percent and 45 percent automatically.
Ms Codjoe said: “The amount depends on what income tax rate you pay. And remember that private pension savings all benefit from tax relief.
To compare pension plans from all the top providers, you can use money.co.uk’s comparison tool here.
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