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Women fail to close gender pension gap

Joanna Faith
Written By:
Joanna Faith
Posted:
Updated:
20/07/2016

Women still lag behind men when it comes to saving for retirement, a study reveals.

Research by pension provider Aegon found 10% of British women are on track to receive the retirement income they want – up from 5% in April 2015 – but the figure is still some way off the male average of 14%.

In more positive news, the findings suggest 14% of women and 16% of men are saving more into their pension as a direct result of the freedom rules that came into force last year, and allow people over 55 full access to their retirement savings.

However, in terms of how much they have saved, women are again falling behind. The findings suggest the average woman has £20,000 in pensions by the time she reaches retirement, less than half the £52,500 men living in the UK have saved.

Women also fall behind their male counterparts on how regularly they review the performance of their savings and taking steps to review their plans for retirement.

Just 21% of women have checked the performance of their pension within the last six months, while only 19% have taken actual steps to review their plans for retirement. This is well below the average engagement levels of men, of whom 27% have checked the performance of their pension in the last six months and 25% have taken steps to review their plans.

Kate Smith, head of pensions at Aegon, said: “Despite encouraging signs for women, the truth is that their expectations are simply not lining up with reality. The value of women’s pension pots is well under half of their male counterparts but they currently expect to retire aged 63, a year earlier than men. This target retirement age comes against a backdrop of an increasing state pension age for women.

“Over the next four years women’s state pension age will be increased to 65. With this in mind, they’ll need to fund an additional two years of retirement from an inadequate pension pot before the state pension kicks in, unless other income, such as their partner’s salary or retirement savings is available.”