Pensions: Women saving less than men


New research has shown that women are saving less than men for their retirement.

The study by the Halifax found that over the past year the gap between what men and women save for retirement has widened. The amount men save for when they finish work has actually risen during the last 12 months to 10.2% of their income, up from 9.7%. At the same time the percentage of their wages which women save has fallen from 8.8% to 7.5%.

According to the Halifax 49% of men are making adequate provision for retirement, compared to 42% of women.

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The figures back up research done by the Department for Work & Pensions (DWP) which showed 6.9 million men were contributing to pensions, compared to 6.4 million women.

Squeeze on household budgets

There appears to be a number of reasons for the gap between men and women in terms of making provision for retirement.

Firstly household budgets have become tighter, and whilst it might feel like a throwback to the 1950’s, the survey found more women saying the amount they spent on household goods had risen. Although inflation now seems to be falling, over the past 12 months prices have risen faster than wages, meaning in many cases there is less money to spend on discretionary items such as pensions, and it seems that more women are affected than men.

Secondly women spend less time in paid employment than men and thirdly there is still a gap between male and female wages, which reduces pension contributions for women, especially in workplace schemes where the amount paid in is often based on a percentage of salary.

Martin Ellis, of the Halifax, said: “The fall in the amount women are saving towards a pension compared with the increase by men over the past year is likely to reflect the finding that fewer women than men are reporting that their current financial circumstances are comfortable, with more women are also reporting that money is tight.”

He continued: “Women are therefore reacting to these conditions and reducing the amount that they are putting into their pensions.”

Male v Female wages

The retirement funding gap is made worse by the fact that men tend to have higher incomes than women. Although the difference is narrowing, with women’s earnings increasing by 43% over the past 10 years; more than men’s incomes, which have risen by 36%.

However, the gap between male and female pay is still large, with men earning an average of £36,511 per year in 2011 against average earnings for women of £27,006.

Help for women saving for retirement

The research shows a clear gap between the retirement provision made by men and women, however there are some reasons to believe this will narrow.

Firstly the gap between male and female wages is closing and more quickly amongst younger workers.

Secondly, the introduction of auto enrolment, which will start to be phased in later this year, will mean all workers have the opportunity to save into work place pensions into which their employer must contribute.

Finally, the flat rate State Pension, to be introduced from 2015, will be paid in full to women irrespective of the National Insurance record. At present many women do not get a full basic State Pension because they have paid insufficient National Insurance, often because they have stayed at home to raise a family.

Our team of Independent Financial Advisers in Nottingham are experienced in developing retirement income strategies for clients the length and breadth of the UK. If you are approaching retirement and would like advice on your options call one of our IFAs today on 0115 933 8433, alternatively enquire online or email