Personal Pension 

Half of women financially unprepared for retirement

Half of women financially unprepared for retirement

Half of female workers feel financially unprepared to face retirement, compared to around a third of male employees, due to the gender savings gap.

A survey by Close Brothers and the Pensions And Lifetime Savings Association (PLSA), conducted among 1,000 employers and 2,009 employees, revealed that only 23 per cent of female workers feel well prepared for retirement, compared with more than a third of men (36 per cent).

Regarding pension pots, the average amount in a woman’s workplace pension scheme is less than half that of their male colleagues, £53,000 and £120,000, respectively.

Women are twice as likely to have less than £5,000 in workplace savings compared to their male counterparts, the research revealed.

According to Jeanette Makings, head of financial education at Close Brothers, the savings crisis “is thrown into stark relief when looked at under the lens of gender imbalance”.

She said: “Women are not only earning less and therefore saving less, but are significantly less confident about the savings options available and how to choose what’s best for them.”

Looking at non-workplace savings, the research showed that while around a third of male employees have less than £5,000 in savings, this increases to two in five among women.

Female employees were also found to be saving nearly a quarter less than men in non-pension savings - £221 and £305 per month, respectively -, a difference of more than a thousand pounds a year.

The origin of this saving gap is a difference in pay, with the mean annual salary of women surveyed being £27,379 compared to £37,655 for men, nearly 30 per cent less.

This imbalance means that 42 per cent of female workers don’t think they get enough salary and workplace benefits to save, compared with 27 per cent of men.

Woman are also less confident about choosing the right financial product, with only a third trusting their choices, compares with 45 per cent of men.

Ms Makings said: “Women are more likely to trust friends and family or personal savings websites, which are unlikely to be able to provide suitable and comprehensive information across the entire savings landscape.

“Financial educators, like employers, are better placed to offer guidance and information, but they need to consider the diverse needs of their audience, including what style and content suits the individual members of their workplace.”

According to research from Salisbury House Wealth, based on data on personal pensions published by the government last month, the savings gap has widened by 16 per cent in the past five years.

There is added concern for women if they are divorced, since they are missing out on £5bn in pension payments every single year, according to Scottish Widows.