More needs to be done to help close the gender pension gap, analysis by Profile Pensions has found.
A study conducted by Profile Pensions has revealed that women nationwide are at risk of receiving retirement incomes thousands of pounds lower a year than their male counterparts.
The pensions company analysed its own internal data from more than 20,000 customers aged 22 to 66 to see which areas of the UK had the largest pension gender gaps.
Throughout the nation, there are significant differences in pension value, with women in some parts of the UK retiring with a pension pot that is up to 50 per cent less than that of the average man.
Michelle Gribbin, chief investment officer at Profile Pensions, told FTAdviser In Focus: “Unfortunately, this research has further highlighted the gulf that exists between the amount of money men take home in comparison to women, both during their working lives and for their pensions.
"With this in mind, as well as the most recent inflation data to consider, there is little sign of prosperity for the time being. It seems efforts need to be doubled if we are to bring about greater financial security to women as they move towards retirement.”
When looking at the country as a whole, the research found:
- The average male pension has a value of £40,084, compared to £24,445 for females – a difference of just under £40% or £16,639.
- Northern Scotland is where the pension gender gap is widest, where men’s pension pots are almost 50% bigger than those belonging to women.
- The average value of men’s pensions in this area is £41,603, nearly double the size of the average woman’s pension value, standing at £20,978.
- The gap is also very wide in East Anglia. Here, the average male pension value is £45,429, whereas the average pension value for women is 49% less at £23,391.
- The lowest pension gender gap is in Greater London, where the average female pension pot is 30% higher than the female national average.
Gribbin commented: "The gender pay gap and the gender pension gap go hand in hand.
Men, on average, earn more than women, and therefore can save and receive larger contributions from employers into their pension pot. It’s clear there’s much more to be done to help women gain the security they need going into retirement.
Under automatic enrolment rules, employers contribute 3 per cent to the employee’s pension pot, 4 per cent comes direct from their payroll and the remaining 1 per cent is made up by tax relief.
Profile Pensions urged individual employees to consider increasing their contributions when they can to improve their pension pot.