Women aged 65 have an average pension wealth of £35,800, which is just one fifth of men's of the same age, new research has found.
The Chartered Insurance Institute’s (CII) ‘Insuring Women’s Futures’ task force today (24 October) published a 20 page-long report titled Solving Women’s pension deficit to improve retirement outcomes for all, which analyses data deriving from sources including government statistics, pensions organisations and the pensions industry.
The research shows women today are living longer, are better educated and have greater access to career opportunities.
However, with earnings forming the basis for pension saving, the gender pay gap is contributing to women having a pensions deficit when compared to men.
Women today continue to retire with lower retirement incomes relative to their male counterparts - men’s weekly occupational pension over the last decade was 83 per cent higher than women’s, and they were receiving £29,000 more in state pension over 20 years.
A mere 24 per cent of women and 17 per cent of men have defined benefit pensions, with more women working in lower paid public sector roles.
The average male final salary pension (£62,900) is almost double that of the average female (£32,000), the research found.
What's more, the £35,800 average pension wealth is a mere fraction of women's financial needs in retirement and does not take into account life care costs amounting to an average of £132,000 for a 65-year-old woman entering a care home in the UK.
Figures published by the Office for National Statistics in September showed life expectancy at birth stood at 79.2 for a man and 82.9 for a woman in 2017.
According to Jane Portas, Insuring Women’s Futures committee lead on women's risks in life and PwC partner, women in Britain today contribute to the economy and society more than ever before.
She said: "A young British woman can expect to work until she is 70, do the lion’s share of family caring, and save hard for her retirement.
"And yet with lower lifelong earnings, she risks facing financial insecurity in later life, and the prospect of not being able to pay for her own care."
The introduction of pensions freedoms in 2015 has brought additional risks for women, with factors such as investment experience and access to advice contributing to a gender drawdown gap - older women are facing a 37 per cent retirement income shortfall compared to men.
The report highlights 12 financial ‘Perils and Pitfalls’ that impact women’s financial resilience throughout life and culminate in a pension deficit, including young women’s financial capability; the motherhood penalty and part time working; and improving how the insurance and personal finance profession serves women.
The Insuring Women’s Futures Market Task Force - made up of senior leaders from across the insurance and personal finance profession - will take steps to address some of the root causes of these.
Ms Portas said before long a third of the population, and more women than men, are expected to be above state pension age.