The number of women preparing adequately for retirement has reached the lowest point in nine years, according to a report published today by Scottish Widows.
The firm’s 2013 Women and pensions report found only two out of five women are preparing adequately for retirement, compared to almost half of men.
This figure represents a 2 per cent drop from 42 per cent from last year and a 10 per cent slide compared to the 50 per cent that were deemed to be saving adequately in 2011. The survey has been conducted annually for nine years.
The report considers an individual to be saving adequately if they are putting aside at least 12 per cent of their income or expecting their main retirement income to come from a defined benefits pension.
Of the 5,000-plus respondents, over a third of women and over a quarter of men have no pension whatsoever. Women who are saving are putting aside only £182 a month on average, compared to the £250 put aside by men.
The total amount of people Scottish Widows classified as “preparing adequately for retirement” peaked in 2009 at 54 per cent. However, the percentage of women doing so peaked at 50 per cent in 2011.
Lynn Graves, head of business development for corporate pensions at Scottish Widows, said: “It is worrying to see that women are continuing to lag behind men in retirement savings. The number of women preparing adequately for retirement has dropped from last year to a record low.
“This growing gender gap in retirement savings means that women are facing an ever increasing shortfall when it comes to retiring and must act now to ensure they will not be left exposed in later life.”
Tom McPhail, head of pensions head of pensions research at Hargreaves Lansdown, said: “Where a husband is working and their wife is working part-time or taking a career break, they can still make pension contributions on behalf of their partner, using the universal pension allowance. This is good financial planning because it makes sense to have two incomes in retirement rather than one; that way you take advantage of both partners’ tax-free personal allowance.
“There is more that can be done to help women enjoy a comparable standard of retirement provision to men. The government can raise universal pension allowance, which has been stuck at £3,600 since 2001 and is falling woefully behind against rising prices. This is an important allowance widely used by non-earning spouses, those taking career breaks and children. Had this increased by Retail Price Index inflation it would now be over £5,289.”