Two million single mothers could face poverty in retirement

Three quarters (75 per cent) of single mothers, representing around two million women, could face living in poverty when they retire, research from Scottish Widows has found.

Scottish Widows’ annual Women and Retirement Report highlighted the impact that the ‘motherhood penalty has on later life, revealing that deep-rooted structural inequalities cause women to earn less, work less and save less for retirement when they become parents.

In particular, the report found that the issue of unavailable or expensive childcare disproportionately impacts the job prospects of mothers, as more than a third (37 per cent) leave jobs to look after their children, while nearly half (48 per cent) said that having children slowed their career progression.

The report suggested that these concerns are also exacerbated for single mothers who are unable to share the burden of day-to-day costs and childcare provision with a partner.

Indeed, according to the research, over half (51 per cent) of single mothers struggle to find jobs in the first place, while almost half (46 per cent) of single mothers have reduced their hours to manage childcare.

This could have a lasting impact on later life stability, as the research estimated that a permanent move to part-time work at age 30 can cost women £47,000 in their pension pot at retirement.

Childcare was also identified as a key contributor to the overall gender pension gap, as the research found that women typically take on substantially more childcare than men, which limits the amount they can work over their lifetime and reduces the amount they can save into their pensions.

The use of professional childcare services was not an option for many, as the average cost of full-time professional childcare at a nursery for child under two in Great Britain represents 64 per cent of the take-home pay of the average person in Great Britain, at £14,000 a year.

This makes childcare unaffordable for the average family, with just over a third (37 per cent) of mothers and 33 per cent of fathers having professional childcare for any days of the working week.

Instead, nearly half (44 per cent) of mothers spend all five working days looking after their children (compared to just 16 per cent of fathers), in turn limiting the hours that women can work over their lifetime and compounding the impact of the gender pay gap.

Scottish Widows argued that issues such as this are the reason why the gender pension gap ends up being over double the size of the gender pay gap, at 39 per cent compared to 15 per cent.

‍