New research has shown just how unprepared some women are for retirement and how far they are falling behind their male counterparts.
The Scottish Widows 2013 Woman and Pensions Report, which surveyed 5,000 people, came to some shocking conclusions:
- Overall only 45% of people are preparing adequately for retirement by putting at least 12% of their salary into a pension each month
- Only 40% of women are preparing sufficiently for retirement, compared to 49% of men
- Since 2011 the numbers of men and women preparing adequately for retirement have both fallen
- 37% of women have no pension provision whatsoever, whilst 27% of men are in the same position
- Those women who do save each month put aside an average of £182, significantly lower than the male average of £260
Responding to the survey, Lynn Graves, Head of Business Development, Corporate Pensions at Scottish Widows, said: “It is worrying to see that women are continuing to lag behind men in retirement savings. The number of women preparing adequately for retirement has dropped from last year to a record low. This growing gender gap in retirement savings means that women are facing an ever increasing shortfall when it comes to retiring and must act now to ensure they will not be left exposed in later life.” (Source: Scottish Widows)
Barriers to saving for retirement
The report found that women come up against different barriers to saving adequately for retirement at each stage of their life.
20’s 54% of 22 – 29 year olds don’t have a pension and it’s clear women in their 20’s are prioritising different areas as well as having short term financial concerns. 42% need to prioritise living expenses, whilst 26% of women are repaying debt, 23% are saving for holidays and 18% are saving to get onto the housing ladder.
30’s The main issue for thirtysomethings seems to be working patterns; only 50% of women in their 30’s are in full time employment, compared to 81% of men. Consequently fewer women are in workplace pensions and for those who are, contributions tend to be lower due to a gap between average male and female earnings.
40’s As women move into their 40’s the survey found that priorities change, with 23% of women saying they have put financial support for their children ahead of their own retirement saving. Whilst 24% said they will rely on their partner’s income in retirement. Shockingly though, 79% of these women were in the dark as to exactly what provision their partner or husband had.
50’s Debt is still a major issue, with 24% of women prioritising loan repayments over saving for retirement
Lynn Graves again: “Of particular concern is the number of women in their 40s who are planning to rely on their partner to help support them in retirement, but are unsure of what their pension provision would be were they to separate. We should encourage these individuals to take full responsibility for their financial independence. Knowing what you are entitled to allows you to make informed choices and gives you a back-up plan if anything were to go wrong.”
“The pensions industry, Government and employers need to work together to raise awareness of the unique lifestyle pressures that take their toll on women’s savings at different ages and help women prioritise their pensions. Initiatives such as auto-enrolment are fundamental in helping the nation’s workers to think about saving, but women outside the workplace need greater access to information and guidance about other retirement options.”
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