Fidelity International’s new report into women’s finances shows concerning disparity around pension pots and a lack of investment.

An additional 1% of young women’s’ salary paid towards their pension could help them reduce the gap between them and male counterparts’ pension.

Fidelity International’s Women in Finance report tells a sobering story. The average pension pot for a man aged between 25 and 34 will be worth £142,836 at state pension age of 68, while for a woman it will be just £126,784. This 11% gap comes from women still earning less than men in the same roles, and taking time away from their careers to raise children or care for sick and elderly relatives. These are described by Fidelity as the ‘motherhood penalty’ and good daughter penalty’ respectively.

But paying a little bit more into their pensions from an early age could close the gap – with Fidelity suggesting an average extra contribution of £35 a month over 39 years.

“We live longer, earn less and are more likely to take career breaks or work part-time,” said Maike Currie, investment director at Fidelity. “To unlock the financial power of women, we need to address the personal, professional and policy barriers stopping women from investing.”

There are a number of other issues flagged by Currie. She points to women shying away from risk and keeping cash rather than investing in finance products. Secondly, the investment industry needs to do more to “build trust and understanding” of their products and services to women.

At policy level, the design of pensions need to be questioned about whether they “take account of the unique life choices and challenges women face”.

Fidelity said it would use the report to inform its Fidelity Women & Money Innovation Labs. The labs bring together industry, government and other influencers to identify ways of unlocking women’s financial power.

Kevin Reed is one of the UK’s most senior accounting and finance journalists. He is a former editor of Accountancy Age and Financial Director, and writes regularly on corporate and professional services governance

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