There is a growing gender pensions gap. In a world where there are numerous headlines about pay inequality, and difficulties in women getting back into the workplace after raising children, it’s no great surprise.
Ironically, the issues come to the fore in what Aegon describes as a ‘celebration’ to recognise 100 years of women the vote. Its analysis of information contained in the Annual Survey of Hours and Earnings data finds that, by the time women reach 50, they have on average only half the pension savings of men: £56,000 compared to £112,000.
Attempting to broach the gap would require a 30-year old woman to pay an extra £21 a month into her pension – rising to £360 a month by 50.
Kate Smith, head of pensions at Aegon, said: “It’s shocking that 100 years after women secured the vote, we have a gender pay gap across every occupation. The fact that the pay gap filters down to mean women receive lower pension incomes is a double blow.”
Nearly half of women (49%) say they’re not confident about their chances of a secure retirement, compared to 33% of men.
Understanding what you will need to save to reach any retirement income goals is a fundamental step, but 42% of women have never thought about how much they’ll eventually need – creating a risk they won’t save enough. This is borne out in the research: one in four women (28%) don’t know how much they’ve saved compared to 9% of men.
“When you factor in that women’s ability to save is further interrupted by breaks in their career to raise a family or care for elderly parents, the pension gap reaches epic proportions, making it difficult to catch up,” said Smith.
The quicker women remedy the situation; by analysing their needs and current savings pot, the cheaper it will be to close the gap.
“Our figures show that women in the early part of their career are within touching distance of men’s overall savings – by the time pensions freedoms are an option, the pension pots of men are out of sight,” concludes Smith.
This was written by editorial staff at Professional Adviser. All views are from the publication.
Further reading on this topic: