The pandemic has increased the gender pensions gap to almost £200,000, studies have shown, but there are steps women can take to improve their financial security later in life.
Data from the Centre for Economics, Business and Research has revealed the pandemic has increased the gender pensions gap, despite women giving a bigger proportion of their income to pensions over recent years.
According to Michelle Crowley, wealth planner at Succession Wealth, there were several reasons for this.
She said: "One is that women are more likely to take a career break or work part-time, especially when they have young children.
"In fact, 75 per cent of part-time workers are women. Women are also more likely to work in low-income positions too, and in industries affected most acutely by the pandemic."
Crowley pointed to the average annual difference in median wage between men and women in full-time work, which stands at £6,100.
She said: "When looking at these differences, the focus is often on the short-term financial impact. However, the long term, and what it means for retirement, is just as important."
Here are Crowley's five tips to help women get on track financially:
1. Start saving as soon as you can
Setting retirement savings goals can seem challenging. However, recognising that you’ll be saving this over your entire career can make it seem less daunting, and the reality is that the earlier you start to build your pot, the better position you’ll be in.
It is, of course, never too late to start building a pension, but starting early will give you longer to benefit from investment returns and compound interest, boosting your fund further.
Despite this, 17 per cent of women aren’t saving anything at all. It is important to understand that even small but regular contributions can add up in the long term.
2. Review your pension arrangements
Under auto-enrolment, most workers will now be automatically enrolled in their workplace pension scheme.
It’s worth taking some time to understand what you’re contributing, what your employer is contributing, and how pension investments are helping these contributions to grow.
Your pension provider will also provide a pension forecast, showing an estimate of what your pension is expected to be worth at retirement. It can help you see if you’re on track.
You may also have pensions from previous employers too, and you should review these alongside your current one. In some cases, it makes sense to consolidate pensions into a single pot, making your savings easier to manage.
3. Speak to your employer
Speaking to your employer can help you understand the benefits on offer.
For example, if you’re not eligible for auto-enrolment, your employer may still offer you a Workplace Pension scheme if you speak to them.