Women ‘underdogs in retirement’
A quarter of women aged 40-54 say they are not even thinking about how they will finance their retirement, compared to 16% of men in the same age group.
This comes against the backdrop that a quarter of women retiring this year will fail to qualify for the full Basic State Pension according to research carried out by Prudential.
YouGov states that one of the reasons behind the gender gap is that few pension plans meet the specific needs of women. They do not take in to account maternity leave and employment breaks to raise children, according to Adele Gritten, head of financial services at YouGov.
This has disappointed women as 39% surveyed felt that their pension companies did not ‘take their career paths into consideration’.
This lack of clarity coupled with the general lack of financial knowledge can lead to women being let down by their pensions.
Only four in ten women felt that they had a good enough understanding of financial matters in general and 58% of the women surveyed found pensions ‘confusing’ compared to 44% of men. Consequently three quarters of women aged 40 and under wanted ‘more information about pensions’.
YouGov states that education is needed to begin to rectify the gender gap.The Government is planning to close the gap with a flat rate State pension next year which would simplify the current means tested system.
The current system, which consists of a Basic State Pension and Second State Pension (S2P, formerly known as Serps), will be replaced by a single scheme paying £140 a week for those with a 30-year national insurance record from 2016, regardless of gender. There are calls for similar initiatives in the private sector.
YouGov’s research reveals that there is an overwhelming need for more clarity in pensions along with more consideration of women’s more diverse financial needs.
It points out that several financial services providers are already creating products just for women, to fill this ‘untapped and unfulfilled market’ such as car and health insurance and savings plans.
Gritten states that it is vital that “Pension providers …meet that need – in a format that is clear and concise – so that today’s busy woman can take control of saving for their retirement.”