When Karina began her working career after graduating from university, she was full of determination and ambition.
However, after meeting her former partner and having her first baby at the age of 26, she went on maternity leave and just as she was negotiating returning to work, she discovered she was pregnant again.
Karina, now 37, told The i Paper: “I wanted to go back to work, but it seemed so difficult. My commute was an hour-and-a-half and there was not the flexibility I needed.
“My partner, who was a project manager, persuaded me to be a stay at home mum and said he earned enough to support us, and why would we pay for someone else to raise our kids when we could afford it?
“I was a bit naive as I had been so career-driven, but I love my girls and enjoy being a mum, so it was the right decision at that time.”
Karina, who now has three daughters, aged 11, nine and three, separated from her partner in January this year after their relationship broke down. Although they had been together for 14 years and they had been engaged for 10 years, they were not married.
If a couple are cohabiting but not married, they do not have any automatic rights to the other’s pension – even if they have children together.
Karina, who only wants to be known by her first name and lives in Bromley, has stayed in the house, which is owned by her partner, and are splitting time with the children between them while trying to sort things out financially.
However, Karina has realised that she only has a pension pot totalling £480 – not helped by the fact that she was out of the workplace for a decade while raising her children.
She believes the gender pay gap that exists in pensions is “terrifying” and also “deeply unfair”, as a lot of women end up taking time out of work to bring up children or work part-time or reduced hours to fit around family life.
Karina is sharing her story as new data reveals that women in the UK are retiring with significantly less than men.
Mercer, a business consultancy firm, has released new insights from now: pensions and the Pensions Policy Institute that show women retire with total pension savings worth almost 55 per cent less than men.
The figures reveal that by the time a woman reaches the retirement age of 67, she will on average have pension savings of around £105,000. This is compared with a man, who on average will have saved £232,000 in the same period – a gap of £127,000.
Automatic enrolment, introduced in 2012, has brought more than 22 million people into a workplace pension scheme. But to qualify for automatic enrolment, people need to earn at least £10,000 per year in a single role. On top of this, contributions to a pension are only taken once the qualifying earnings amount of £6,240 has been deducted.
Women are more likely to work part-time and 79 per cent of such women earn less than £10,000. In comparison, only nine per cent of part-time male employees earn below the trigger level.
Karina moved to the UK from Estonia in 2008 to study business management, accounting and finance at Nottingham Trent University.
“The degree included a work placement year, which is why I chose it,” said Karina. “I had a placement in London and the company was very happy with me and offered me a job. They waited for me to finish my studies and I had a job lined up as a purchase ledger clerk in a finance department.”
After finishing university in 2012, Karina moved to London and began working for the company. She worked her way into different positions and the firm paid for her to do various courses.
“I was enjoying my work and they were investing in me and I was happy,” she recalled.
Karina met her partner in 2013 and the year after, she had her first baby and ended up not returning to work after maternity leave and having her other two daughters.
“I never really thought about pensions or the future because I hadn’t been educated about them properly and they are not really spoken about,” she said.
Karina says she was very career driven – but will now be back to square one after a big gap out of work“The only reason I ended up joining a work pension scheme for a short while is because it became mandatory with auto enrolment.”
Karina says although she has not worked for the last 10 years since having children, she has done voluntary work and she is treasurer at the school, looking after accounts and helping with events.
“If I could have done a job which fit around my children, I would have done it. But there was no flexibility at that time. I have been volunteering to keep up with my skills.”
Karina has now started looking for work as she wants to build up her pension pot. But she is determined not to just take any job, and wants to find one that fills her skillset.
“I want to warn women to think about pensions earlier and to also know their rights as if their relationship breaks down and they are not married, they could be entitled to nothing.
“I regret giving up work for so long because now, I am not even starting out from the point where I left – I am starting from the beginning. I am starting at the same level as people leaving university, but they are much younger than me.
“Having such a massive gap in my career throws me back. I have the skills from working in a junior position and I was progressing well.
“I do feel panicked about only having £480 in my pension and I think there needs to be more education and awareness.”
Patrick Luthi, Mercer UK’s head of DC product and now: pensions chief executive, said: “We acknowledge there has been some progress in addressing the gender pay gap. However, women in the UK still face significant barriers to build adequate pension savings, which can lead to poor retirement incomes.
“We continue to call for a review of the auto enrolment earnings trigger and the lower earnings limit. Removing these could go some way to addressing this historic imbalance by helping women to build a financially secure future – but the wider impacts of affordability need to be explored.”
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