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‘Gaping chasm’ between men and women’s pension savings

‘Gaping chasm’ between men and women’s pension savings
Emma Lunn
Written By:
Emma Lunn

Women pay £57 less into their pension on average than men each month, 28% less on average, according to Interactive Investor.

Research by the investment platform, based on a survey of 2,000 adults by Opinium, also shows that pension savings drop off in mid-life, with middle-aged pension savers paying in a “worrying” 45% less than younger pension savers on average.

The study found that total pension contributions for women, including employer contributions are £114 less on average each month than for men.

Pension savers in mid-life aged 35 to 54 pay £75 less into their pension each month than younger pension savers aged 18 to 34.

Middle-aged pension savers contribute £169 less into their pension each month on average than younger pension savers, including employee and employer pension contributions.

The data is based on pension savers with a defined contribution pension and excludes pension savers with a defined benefit/final salary pension.

‘A huge gulf between contributions’

Alice Guy, Interactive Investor head of pension and savings, said: “The figures reveal a stark divide between the pension haves and the have nots, with nearly half of both women and men contributing less than £100 each month to their pension. At the higher end of pension contributions, men are doing better than women, with over on fifth of men contributing more than £250 to their pension each month, compared with only one in eight women.

“Over all, there is a huge gulf between men and women’s pension contributions, which makes it much more difficult for women to achieve a comfortable retirement in the long run. Women’s pension contributions often start to drop off in mid-life if they take time out of the workplace or reduce their hours to fit around childcare or other caring responsibilities. The findings echo DWP research, which shows that women have a 35% pension gap, compared to men once they reach 55, the minimum age they can start drawing their pension.

“It’s often a double whammy for women as lower wages combine with increased costs to make it harder to keep up with pension contributions. It’s important for women to try to keep their pension contributions going in mid-life, particularly if they reduce their hours, as even small amounts can add up to a decent retirement income, especially with an additional boost from pension tax relief and employers’ contributions.”