PensionsMar 1 2018

Women less engaged with pension guidance than men

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Women less engaged with pension guidance than men

Women are still lagging behind men when it comes to saving for retirement, according to data from guidance site Pension Monster.

Only a third (32 per cent) of consumers currently using the free pension tool offered by Selectapension are female, suggesting men generally take more active interest in their savings, the company said.

Pension Monster analysis is based on 7,974 cases recorded between October 2016 and January 2018. 

This lack of engagement appears to correlate with savers pension pot sizes, with women accumulating just £70,000, less than half the size of pots of the male users, which have an £192,000 average pot size.

The career breaks and part-time jobs many women take during their working lives all contribute to this pension shortfall, the company added.

However, women that access professional financial advice have a significantly bigger pot size, of around £125,000, compared to those earning a similar salary who are unadvised.

According to Peter Bradshaw, national accounts director at Pension Monster, efforts to maintain a high level of engagement are necessary, despite the initial success of auto-enrolment.

Introduced in 2012, auto-enrolment has now reached nine million people, with opt-out rates of less than 10 per cent.

Mr Bradshaw said: "Women in particular will benefit from early and ongoing planning and guidance.

"Considering women will likely take career breaks for child care, and the fact life expectancy for women has reached 83-years-old, they have the most to benefit from early and ongoing planning and guidance.

"Advisers should take advantage of online tools to encourage more engagement to help their clients plan for a better retirement."

Nathan Long, senior pension analyst at Hargreaves Lansdown, argued that women typically tend not to be as engaged as men with their finances, which means they risk reaching retirement with insufficient amounts saved for their life after work.

He said: "Often women lack the confidence to engage more fully with their finances, but Hargreaves Lansdown research has actually found that women can be more successful investors than men.

"Successful retirement planning depends on taking ownership of your pension savings, irrespective of gender.

"Auto-enrolment does not encourage greater engagement, but it can easily be tweaked to do so.

"Allowing people to choose which provider their workplace pension contributions are paid to would really ramp up the levels of personal ownership, much like it has done in Australia."

Selectapension has been in talks with several employers that would include Pension Monster in their websites.

By entering some information the system creates a tailored report giving an overview of options, how much savers need to save to reach their retirement goals, and product suggestions from a variety of providers.

maria.espadinha@ft.com