As women navigate their financial journey towards retirement, addressing the gender pension gap is paramount to ensure a secure and comfortable future. A detailed study revealed that in India, women’s pensions are nearly 40% lower than those of men, and this disparity further amplifies as they age.

Closing this gap requires strategic actions and informed decisions. Here are key steps that women, and indeed all savers, can take to boost their pension savings and bridge the gender pension divide:

  1. Maximize Company Pension Schemes:

  • For employed individuals, ensuring full participation in their company’s pension scheme is crucial. Employers often match contributions, effectively providing additional money towards your retirement fund.
  • You have the option to contribute a maximum of 8.33% of your salary to the EPS (Employee Pension Scheme). However, the employer’s contribution is capped at 8.33% of ₹15,000 per month (equivalent to ₹1,250 per month). Therefore, if your salary exceeds ₹15,000 per month, you can choose to make an extra voluntary contribution to the EPS to increase your pension amount.

  1. Sustain Pension Contributions During Maternity Leave:

  • Women should maintain their pension contributions during maternity leave, ensuring they don’t opt out of their employer’s pension scheme.
  • The Maternity Benefit Act, 1961 (M.B. Act), which provides for 12 weeks wages during maternity as well as paid leave in certain other related contingencies.

  1. Consider Returning to Work After Parental Leave:

  • Returning to work allows for consistent pension contributions and potential career advancement.

  1. Advocate for Equal Pay:

  • Women should be proactive in seeking pay raises to increase their pension contributions and overall income.
  • Addressing the gender pay gap is vital, and resources are available to guide individuals on how to negotiate and advocate for equal pay.

  1. Embrace Investment Risk and Knowledge:

  • Women should consider taking more investment risks, especially in their younger years, allowing their investments to potentially grow and recover over time.
  • Overcoming hesitancy and gaining confidence in investment decisions can significantly impact future financial security.

  1. Consolidate Multiple Pension Pots:

  • For those with multiple pension pots from previous employers, consolidating them into one plan can provide a clear view of total savings and aid in better retirement planning.

By implementing these strategies and being proactive in managing their pension savings, women can take substantial steps towards closing the pension gap and achieving a financially stable retirement. It’s essential to stay informed, make informed decisions, and work towards securing a comfortable retirement for all.