BUDGET 2025: Comprehensive Pension Reform ‘Urgent Priority' Goldsmiths Academic Claims

Comprehensive pension reform to tackle the deep-seated inequalities in pension provision should remain an urgent priority, a Goldsmiths academic said today.

Dr Ariane Agunsoye, a Senior Lecturer in Economics argued that full scale reform was needed to equalise pensions for women, ethnic minorities and low-income groups.  

With rumours of a cap on tax relief for salary sacrifice schemes featuring in the budget, Dr Agunsoye called instead for Government to subsidise pension savings for groups marginalised in the current system. 

A pensions expert, Dr Agunsoye has conducted extensive research on pension inequalities, with her research revealing that rather than a lack of financial information or poor decision making about the future, the reasons for under pensioning are intrinsic to the pensions system itself. 

Dr Agunsoye said: 

“Most policy solutions focus on improving pension savings either through increasing automatic enrolment contributions or providing financial education, and both approaches individualise the problem. Research shows that we need to think instead about the structure of the pension system and how people make decisions about pensions when they experience constraints built into the system” 

Currently the pension system benefits those who can guarantee long periods of being in work, who work full time and who are then able to make investments of their income towards the future. But the pension system provides little support to those taking care breaks – usually women –, working part time, being self-employed or workers who dont have continuous employment.  

Women are at the receiving end of a stark gender pensions gap with the value of their pensions 20% of the value of similarly aged men upon retirement. Women’s long-term saving goals have been found to be 23% lower than those of men when both are receiving a similar income. Strikingly, this wealth inequality emerges only in women’s mid-30s, up until then wealth ownership is evenly distributed between men and women. While estimates reveal that 10 million are ineligible for automatic enrolment. 

Facing up to the reality that our pension system is not equipped to deal with people who aren’t able to stay in continuous work means the Government should intervene by subsidising pension savings and ensuring affordable care costs. 

“Workplace pension savings should be subsidized when experiencing caring breaks, working part-time, being self-employed or for casual workers. There should also be new forms of subsidised financial instruments, particularly ISAs, which could be a short term means for continuing pension payments to people facing constraints. In the long term, the government needs to rethink the construction of the pension system”, Dr Agunsoye said.  

Dr Agunsoye, whose research focuses on the interaction between political economy and personal finance, has recently done research into the way that financial advice is also gendered. The findings will have significant impact on the regulation of financial services.

“Financial advisors are aware of the gender pensions gap and could reduce it, but they adopt diverse approaches to financial advice. Dependent on their own background, some try to support women, easing the stress of dealing with money, while others, without meaning to, reinforce stereotypes.  The effect of this is that to differing degrees they risk compounding already existent inequalities.”