Pension warning as women face gap of up to 57% in retirement savings – ‘more must be done’

Coronavirus: Martin Lewis advises on pension savings

When you subscribe we will use the information you provide to send you these newsletters. Sometimes they’ll include recommendations for other related newsletters or services we offer. Our Privacy Notice explains more about how we use your data, and your rights. You can unsubscribe at any time.

Pension savings are a significant part of planning towards retirement, and with the state pension being increasingly viewed as a safety net, what Britons put aside throughout their lifetime will be important. However, despite the endeavour seeming to be as simple as just putting money away for later life, there are some discrepancies which mean many are missing out. New data from online pension provider, PensionBee, as shared exclusively with Express.co.uk has shown the extent of the problems facing women across the country.

The issue relates to the gender pension gap – a matter which means women are often left with less at retirement than their male counterparts.

The PensionBee research showed that in some parts of the country, the UK gender pension gap is as high as 57 percent – depending on savers’ age and regional location.

The issue has been exacerbated for women the most in Northern Ireland, at 57 percent, where average savings for men total £17,883, versus for women at £7,737.

A similar problem is faced for women in the North East and South West, with identical gaps of 46 percent – slightly higher than the national average of 38 percent.

Regardless of where a person lives, though, the issue of the pension gender gap is clearly a significant one. 

But location is not the only determining factor when looking at this matter, showing women have a significant mountain to climb when it comes to their pension.

Indeed, the PensionBee analysis also highlighted the gender gap only widens with age.

In savers aged fifty and over, there is a 46 percent gap – £52,592 compared to £28,249.

This is double the 18 percent gap observed when looking at savers under 30, and the 21 percent gap noted for those in their thirties.

DON’T MISS
Inheritance Tax: DIY Wills could put your finances at risk – check now [ANALYSIS]
Money saving: How Britons can manage their money in later life [EXCLUSIVE]
Nationwide is offering 2% interest rate in great news for savers [INSIGHT]

The findings, therefore, illustrate that as women move closer to retirement, they have significantly less in savings than a man of a similar age.

The impacts of this are stark, meaning some women will be forced to turn to other streams of income such as the state pension to make up for the shortfall.

But with the state pension age also rising, women may have to work longer than they originally hoped for or anticipated. 

Romi Savova, CEO of PensionBee, commented on the matter to Express.co.uk.

She said: “It’s incredibly disappointing to see that, on average, women across the UK have 38 percent less in their pension pots than their male counterparts.

“Everyone deserves to look forward to a happy retirement, regardless of their gender, and more must be done to prevent the gap from developing at the start of a woman’s working life, as we know that it only widens with age.

“Where a pay gap exists for women, a pension gap will follow. Therefore tackling wage inequality is of paramount importance.”

PensionBee also looked at the expected retirement pot of each age group based on particular assumptions.

On average, those aged 50 and over currently are set to retire on £87,500 – the smallest personal pensions.

This is over a third less than individuals under thirty, who are due to retire with an average pot of £140,700 by the time they reach 65.

As a result, Ms Savova urged female savers to keep paying into their pension, even when circumstances change – such as reducing hours or going off on maternity leave. 

She added: “Women are more likely than men to take time off work to look after children, and many women stop contributing to their pension while on maternity leave.

“The combination of lower salaries and long career gaps, with little or no pension saving for years, are a massive disadvantage for women.

“The benefits of compound interest and tax top ups from HMRC make a pension an attractive long-term investment.

“The more women can contribute to their pension now, the more they will be able to improve their quality of life in retirement.”

Source: Read Full Article