Employers, government, providers and advisers need to do more to help the 70 per cent of women who do not know how much pension they will need to retire on, a report by Scottish Widows has claimed.
Scottish Widows’ 28-page report, Women in Retirement 2015, also found that 52 per cent of women were making regular savings for retirement, but the overall amount was significantly less than men. The report said women saved an average of £105 compared with men’s average figure of £177, partly because of lower salaries.
Women aged 40 to 49 with dependant children and dependant parents, struggle most with their financial circumstances, while for 44 per cent of those aged 55 to 65 supporting children is a major financial pressure.
More than half (56 per cent) of self-employed or freelance working women are under-saving, compared with 45 per cent of those who are on permanent contracts.
Knowledge levels are low, with 43 per cent of British women saying they have little or no understanding of individual pension savings.
The report recommends that more needs to be done to encourage women to consider the size of their pension pot, and their financial requirements for retirement at an earlier stage, although it did highlight the positive impact of auto-enrolment.
Because of better workplace engagement, such as AE, almost one third of women – 31 per cent – said they were more optimistic about their financial circumstances compared with 12 months ago, up from 26 per cent last year.
Peter Bradshaw, national accounts director at Selectapension, said: “The gender gap in retirement incomes is a direct result of the gap in pensions savings and, indeed, the lower level of engagement with women throughout pensions planning.
“To help close the gap, more needs to be done to encourage women to save throughout their careers so that they do not face a financial shortfall in later life, and engagement with financial advice is crucial. In turn, this should create a more equal gender balance at retirement.”
Angela Seymour-Jackson, managing director at Aegon UK, said: “The latest findings from Scottish Widows highlight that the majority of women have no idea how much they need to save.
“There are a number of reasons why these divides exist, some of which are more deep-rooted in society than others, but what is clear is that women need to be engaged with directly by the pensions industry.”
Adviser view
Dan Farrow, director of Chelmsford-based SBN Wealth Management, said: “There has always been a discrepancy when compared to males in terms of pension contributions. Everyone however should take some comfort in that AE has the potential to address this and the wider pension savings issue. However the amounts being saved need to be significantly increased across the board, as saving the minimum could lead to a lot of future disappointment.”
