Gender pay gap strikes again, this time for Women’s pension pots

Gender pay gap strikes again, this time for Women’s pension pots

Posted on July 23, 2019 at 9am

A report released earlier this month “Facing an unequal future – closing the gender pensions gapwas compiled by workplace pensions provider Now Pensions based on research conducted by the Pensions Policy Institute and data from the Office for National Statistics.

Alarmingly, it noted that at retirement women on average can expect to receive a pension pot of £51,100 compared to men’s £156,500, meaning that men receive two thirds more than women.

It found that working part-time or taking time off work to care for family contributes to 47 per cent of the difference with the gender pay gap accounting for a further 28 per cent. Women earn around 18 per cent less than men, on average, according to researchers.

The fact that women also tend to live longer than men and pay a disproportionate amount of childcare costs may also make it harder for them to build up a comfortable amount of retirement savings. The report found that to be able to receive the same pension income as men, women would need to have saved up to 7 per cent more by retirement age.

Additionally, divorced women end up particularly worse off averaging just £26,100 compared with £103,500 for divorced men. The figures indicate that divorce affects women’s savings more than men’s, with the variance the result of individual divorce settlement terms. The research found that pension savings can often be the second most valuable asset when couples divorce, however they are often overlooked, with people paying more attention to property – in 2018, there were 118,142 divorces but only 4,632 pension sharing orders were made by courts.

Laura Suter, personal finance analyst at investment platform AJ Bell, stated: “We’ve long known that women’s pension savings are hit by a combination of the gender pay gap, part-time working and the increased burden of childcare costs, but these new figures lay bare the scale of the problem.”

“Women face a triple whammy when it comes to their pensions: first, they are not saving enough, second, they are not investing that money and so are missing out on higher returns over the long term, and third, they live longer and so on average need bigger pots than men at retirement.”

“Raising awareness of the pension gap is the first step. Employers also have a role to play in highlighting the benefits of maintaining pension payments throughout maternity leave, and offering enhanced pension packages for these women.”

At Prosser Knowles we are lucky enough to have a number of male and female advisers of all different ages and specialities, meaning that advisers can see clients into retirement and beyond. It’s important to regularly review pensions to make sure they continue to be in the best place for you and having an adviser/ advisory firm that you trust and that won’t retire before you is equally important. To find out more about our team, please click here.

To speak with one of our advisers click here to arrange a call back.

Written by Kay Crooke – Associate Practice Director at Prosser Knowles Associates Limited.

Stay in touch

If you would like to keep up to date with current industry trends or receive details of our product developments, seminars, events and newsletters, just fill in your details below.

News Feed

Life Insurance Explained #1

The first in a series of videos explaining some of the different types of insurance policies available in the...

Talking with… Laura Evans

Laura Evans, Financial Planning Consultant at Prosser Knowles Associates Limited, met with Kay Crooke to chat...

What is protection insurance and why do I need it?

As parents, its easy to get carried away by day to day life but it's important to value what we do in order to...

Bank of Mum and Dad facing poverty in retirement!

With young adults now leaving home later and later, loans or gifts from family to help them get on the propert...

Nine million middle aged employees are “flying blind” into retirement

Recently, pensions firm Aviva conducted research into the understanding of finances in later life amongst empl...

Are you, or someone you, know looking to get on the property ladder?

Are you, or someone you know, wondering how to get on to the property ladder? If so, this video is an essenti...

A crucial task that shouldn’t be put off!

All too often, we approach retirement with the hope of many years ahead of us to enjoy holidays, spend time wi...

What is Protection Insurance?

Day to day life can be so hectic and complex even when we are healthy and financially secure. Time passes us b...

Millennials face potential homelessness in retirement

According to the first government report into what will happen to UK millennials who have been unable to get o...

Moved jobs a lot?

If so, you may well have picked up a number of pension pots along the way. Official figures suggest that, in...