Women aren’t saving enough for their retirement


A report from Scottish Widows has established that many are unprepared for retirement, particularly women. The report called What Women Need – Pension Provision for Today and Tomorrow, has discovered that the gender pension gap is growing with 13% fewer women saving enough for retirement than men compared with 8% a year ago.

Over that 12-month period, the percentage of men saving adequately for retirement increased from 49% to 54%. However, for women it remains at 41%, with over 7 million financially dependent on their partners.

Main reasons for the gap are because, on average, women earn 38% less than men. Furthermore, for many women family is priority, 36% have at least one child and some 28% have had to stop work or have reduced their savings for the long-term because of their children.

In addition, the report revealed that more men belong to a company pension scheme than women with 35% of women not having any pension scheme compared to 22% of men. Also, typical employer contributions for men are 6.5% of an annual salary, compared to just 5.7% for women.

Even the women who are saving in a pension are saving a smaller percentage of what they earn, effectively compounding the effect of the pay gap. This gender gap in state pensions is falling because of the Government’s reforms, but the gap in private pensions is increasing said Ian Naismith, head of pensions market development at Scottish Widows.

Mr Naismith added that women are less likely to be in full-time employment than men and as a consequence are not building sufficient pension funds. He continued that the outlook for women’s pensions continues to be bleak as their working patterns are unlikely to change in the near future.

Mr Naismith concluded that some women could be left with nothing for their retirement so if they are not contributing to a pension scheme, then they should think about other options such as an Isa.

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