Women are lagging behind men when it comes to pension savings, a new study has found. According to figures released by PensionBee, women over 45 have a pension pot which is a massive 22% smaller than their male counterparts.
This supports recent IFS research on the gender pay gap in the UK, and raises concerns that women will be less able to take care of themselves after retirement.
In fact, women’s rights group The Fawcett Society has commented that women retirees are at “risk of poverty and economic dependence”.
Why Are Women Lagging Behind Men?
Both genders have fairly equal pension pots until the age of 35, when the savings gap suddenly increases. It is no coincidence that this is the age at which many women choose to start their families, and focus on raising their children.
According to the Office of National Statistics, the average UK woman has her first child at the age of 28.5. Over the next ten years, these new mothers can expect to see their pension savings lag by 14% behind their male colleagues.The gap only increases as women get older, with a 16% disparity between the ages of 41 and 45, according to the graph above courtesy of PensionBee. After this, the pension gap increases to 22%, with female pension savings worth £6,000 less than their male counterparts.
The gender pay gap in the UK is not exactly news, but this is the first time that the specific issue of pension savings has been highlighted.
The results are a sobering read for any woman who was already wrestling with the decision to take time away from work to have a child, and prompted The Fawcett Society to note that “dated stereotypes that mean women continue to be most likely to pay the price of care”.
“Right across their lives women earn less and so have less to save for their pensions,” added Jemima Olchawski, Head of Policy and Insight at the Fawcett Society. “All this leaves women at risk of poverty and economic dependence in their retirement.”
The findings follow an exhaustive survey by PensionBee, a pension management platform which allows users to track and manage their pension pots online.
According to Romi Savova, the CEO of PensionBee, there is need for greater awareness of the inequality facing female savers – not just from their own employers and the government, but also from the wider pension industry.
Over to you
Are you planning ahead for retirement? The best time to start saving for retirement is now. Retirement is a time to enjoy life, not scrimping and saving.