International Women’s Day

Baroness Gohir Excerpts

Friday 8th March 2024 Lords Chamber

[Baroness Gohir (CB)]

My Lords, I draw attention to my interest set out in the register: I run a women’s rights charity. I am really pleased to be speaking in my first International Women’s Day debate since becoming a Peer. How beautifully the noble Baroness, Lady Casey, has timed her maiden speech to fall on International Women’s Day—I congratulate her on her forthcoming speech. I look forward to hearing not just what she says but her future contributions, and I look forward to working with her on many issues.

My contribution will be on the economic inclusion of minority ethnic women, particularly focusing on pensions and financial literacy. Since the auto-enrolment policy started over a decade ago, it has benefited many women, with more women contributing to their pensions—so the scheme has been a success. However, minority ethnic women will face pension poverty in the future. A high proportion of black and Asian women, particularly Pakistani and Bangladeshi women, have not saved for their pension.

A number of factors contribute to this pension gap. These women have higher unemployment rates. When they are in work, they are more likely to be in lower-paid and part-time jobs, not meeting the threshold for auto-enrolment. Arguments have been put forward for lowering the threshold for auto-enrolment, and I understand that the Government have looked at that and will not decrease that threshold yet. I agree with that, given the cost of living crisis. Even when the threshold is met, women are choosing to opt out, because every pound counts when they face hardship and cannot meet their daily basic needs or afford to eat or feed their families, as the noble Baroness, Lady Boycott, passionately highlighted when she talked about women skipping meals.

However, there are also women who are in work and can afford to make the contributions but still end up opting out of the auto-enrolment scheme. Many factors contribute to this. They may lack knowledge about pensions, and employers are unlikely to raise awareness because they have to contribute to the pension pot. Women may lack knowledge that employers have to contribute, so they may not realise that they are missing out on this free money that goes into their pension pot. Women may not understand that they would be able to pay slightly less tax. There may be a lack of trust: they may feel that employers might not put money into their pension scheme.

Women may not realise that they can opt in even if they do not meet the threshold. This is particularly applicable to young women who may be living at home with their parents. Women may just be putting off thinking about pensions until later and may not fully understand the impact of their decisions. Some Muslim women may not contribute because they do not think that their pension fund investments align with their faith, and they may not be aware that reputable and sharia-compliant pension funds exist.

Minority ethnic women often lack the right advice. Education on pensions is especially important to women who have been out of work for a long time and are returning after long career break. They are even less aware of some of the points that I am raising today. Some women may be coming back to work after 15 or 20 years. It is not just about pensions: minority ethnic women need to be empowered with financial literacy, financial education and education about their financial rights. For example, there will also be many Muslim women who are not in legally registered marriages, such as those who have had a religious marriage in the UK that was not accompanied by a civil marriage in the UK, which means that they will not be able to benefit from their spouse’s pension should the spouse pass away first.

It is not just pensions. Women in such marriages lose out on other financial benefits, such as inheritance rights and financial arrangements during a divorce. Financial literacy could also have a positive impact on reducing religious-only marriages, which are not legally recognised in this country. It may encourage more women to be more assertive about having a legally registered marriage. Some 25% of Muslim women are likely to be in religious-only marriages, according to research by the Muslim Women’s Network UK.

It is clear that improving financial knowledge is key to promoting women’s economic empowerment, and the Government can play a crucial role in this. I would like to understand what steps the Government will take to close the ethnicity pensions gap and improve overall financial literacy for adult women, and what specific measures will be taken to ensure that minority ethnic women are reached with the information that they really need.