Millions of women under 40 are risking financial hardship in retirement because they are not paying into a pension, according to research for pension provider Zurich.
A total of two in five women - 41 per cent - aged 25 to 39, which equates to an estimated 2.56m, have saved nothing in their pension for old age, compared to 30 per cent of their male peers.
Figures from YouGov from a sample size of 1,018 adults aged 18-39 showed that almost one in five women - 16 per cent - do not know how much they are putting aside each month, more than twice the number of men at 7 per cent.
Additionally, 15 per cent of those women surveyed by YouGov said they are unsure which type of pension they are saving into.
The research also found a third - 33 per cent - of women did not know the best way of saving for retirement, compared to 21 per cent of men.
Emma Huntington, managing director of Zurich FutureYou, said far more women than men are saving nothing into a pension for retirement. If women are unable to start saving sooner, they may have reduced financial freedom in later life.
She said: “As well as saving less into their pensions, women are also less engaged with their nest eggs than men, and therefore could fall short of the income they desire for a comfortable old age.
“If this trend continues, it may lead to stark differences in the standard of living men and women can afford in later life. A generation of women could end up working longer than men and facing a less financially secure retirement.”
Ms Huntington said that financial barriers can make it tougher for women to prepare for later life.
She added that on average, women currently don’t earn the same as their male counterparts and are more likely to take on the bulk of responsibility for raising children, which makes it harder for them to save throughout their lives.
“The domino effect of lower wages and starting a family, as well as other financial pressures such as rising house prices, could mean that women in particular are putting retirement saving on the back burner. As a result, women in their twenties and thirties are delaying saving until their forties, or even later.
“Women who start saving later may have to work much longer to build up an adequate pension pot. That’s why it makes sense to save whatever you can afford. You can always increase your contributions in the future.”
Ms Huntington said that for those women planning to take a career break or work part-time to raise children, it is important that they pay more into their pension while they are working full-time.
ruth.gillbe@ft.com
