Scottish Widows highlights growing gender gap in pensions

| October 22, 2012 | 0 Comments
Scottish Widows highlights growing gender gap in pensions

Women are saving £766 a year less than men for their retirement according to life, pensions and investment firm Scottish Widows.

A new report by the firm suggests that the gender gap in pension savings has increased by 10 per cent in the last 12 months and is now at a record high level.

Women are able to save less than men because their earnings tend to be lower, more women work part-time than men, and many are focusing on paying back existing debt.

It is often the woman in the family who takes on the role of caring for relatives, and this is can have a major impact on pension savings.

For a 30-year-old woman, a gender gap of 10 per cent would leave her with 29,800 less in her pension pot than her male counterpart, when she reached 65.

Lynn Graves, of Scottish Widows said: “Important differences in lifestyle such as being more likely to work part-time or have a full-time caring role, mean women often find it more difficult to save for the long term and retirement.”

Scottish Widows claims that women tend to regard their pension savings as
“a pot to dip into to cover unexpected costs” rather ensuring that the money is ring-fenced for their retirement.

As state pension is partly dependent on earnings, women on low wages also face having to manage on a lower state pension when they retire.

Meanwhile, a fall in inflation in September 2012 means that state pensions will increase by 2.5 per cent.

Inflation fell to a 34-month low in September, with the consumer prices index (CPI) measure of inflation now standing at 2.2 per cent.

State pension is linked to the CPI, but a minimum increase of 2.5 per cent is guaranteed.

A year ago, when it reached its peak, CPI inflation was 5.2 per cent.

Retail prices index (RPI) inflation, which includes mortgages and home rental costs, fell from 2.9 per cent to 2.6 per cent in September.

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