Female savers falling short of men
Findings from insurer Aegon reveal men have £73,600, on average, saved in pensions while women have just £24,900.
However, there is some good news as the value of women’s pension pots is increasing.
In April 2015, women had just £16,700 saved in pensions and last year they had £20,400.
Aegon said the increase was down to the ongoing roll–out of workplace auto-enrolment, the introduction of the pension freedoms, and the fear that pension tax relief could be reduced.
But the firm also said women are becoming more aware of the need to provide for later life. In the last two years, women’s ISA savings, specifically for retirement, jumped from £5,400 to £14,900.
The research suggests the pension freedom rules have had a positive impact. As a direct result of the reforms, which allow over 55s complete access to their pension savings, 13% of women are saving more into their pension and 14% have realised they need to plan more for retirement.
However, women are falling down when it comes to engagement. Over two fifths (42%) have never reviewed or taken any action that affects their plans for retirement and just a fifth (19%) have engaged in the last six months. This is well below the levels of men, a quarter (24%) of whom have checked or amended their pension plan in the last six months.
This is perhaps why over a third of women (35%) have absolutely no idea how much they have saved in their pension, the study said.
Kate Smith, head of pensions at Aegon, said: “It can’t go unnoticed that women have made some encouraging steps forward in saving for retirement. However, the difference between men’s and women’s pension savings is stark and there are a number of reasons behind the widening pension savings gender gap. Auto-enrolment has successfully introduced 7.6 million people to workplace pensions but the gender pay gap, which is currently 13.9%, means that men are effectively saving more without even thinking about it.
“Women often face a more disrupted savings journey due to maternity leave and working part time, juggling a career and children, so it’s crucial that they actively engage with their pension savings – burying heads in the sand is simply not an option. So it’s concerning that over a third of women in the UK don’t know how much they have saved in their pension. Without this vital information it’s impossible to know what to do next. Knowledge is power after all, and the more they do now to build up their pension knowledge the better their retirement will be.”