According to Scottish Widows’ latest Women and Retirement report, published today (November 11), a record 59 per cent of women are saving adequately for their retirement, compared with 60 per cent of men.
Despite this progress, the continuing gender pay gap and part-time working ratio means women are still saving £1,300 a year less than men.
This means women would have to work an extra 37 years, taking them past the age of 100, in order to match a man’s pension contribution.
Although auto-enrolment has played a significant role in getting more women to save for the long-term, there are still a number of challenges which are stopping total equality.
According to figures from Scottish Widows, women in full-time work earn £6,100 less than men, which increases to £10,800 for all employment types.
In addition, extra commitments such as childcare tend to fall on women, reducing the number of hours they are able to work and limiting earnings.
These challenges are likely to have been amplified by the Covid pandemic as women are more likely to be working in shut down industries, such as the hospitality trade, where many have been furloughed, seen their hours reduced or been made redundant, the report pointed out.
Jackie Leiper, managing director of workplace savings at Scottish Widows, said there was still a “mountain to climb” before true gender pension parity was achieved.
Ms Leiper said: “Women face decades of extra working before they’ll have a pension to match that of a man’s, which is unfair and unacceptable.
“Until we can resolve structural inequalities, from the gender pay gap to the uneven division of labour at home, we will never have pension equality.”
The research, which surveyed 8,000 people aged over 18, also found that young women are struggling most to save for later life.
Fewer than half (46 per cent) of those in their 20s saved the recommended minimum 12 per cent of salary.
This compared to 54 per cent of men of the same age, and to almost two-thirds (64 per cent) of women in their 50s.
Ms Leiper said: “We’re calling for urgent pension reforms that will help more women save more for retirement, including improved childcare provisions, enhanced pensions for those on maternity leave, the inclusion of pensions in divorce proceedings, and the scrapping of the auto-enrolment minimum earnings threshold.”
Covid-19 impact
Meanwhile, a report from the Chartered Insurance Institute, published earlier this week (November 9), warned that Covid-19 risked delaying the closure of the gender pay gap until 2110, and therefore the gender pension gap to 2160.
According to the CII, before lockdown, the gender pay gap was expected to close in 2050 in the UK, meaning that women were set to reach pension parity in 2100.
To resolve this issue, the institute argued that financial guidance and advice should be available in the workplace to ensure women whose pensions have been depleted by Covid-19 can get their savings pots back on track.
Sian Fisher, chief executive officer of the CII and co-founder of Insuring Women’s Futures, said: “The coronavirus pandemic has reminded us of the importance of paying attention to, and managing, our financial and wider wellbeing.
“There is now an even more urgent need to equip girls and women of all ages and in all situations for a resilient and secure financial life. Firstly, to recover from Covid-19 financial shocks and regain their financial standing, and then to work towards more balanced financial wellbeing and financial security for the long term.
“The profession and government must unite to explore how we can rebuild our collective financial wellbeing with better balance.”
amy.austin@ft.com
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