Why female clients’ pensions saving needs more attention
30 January 2018
Women are significantly lagging behind men in the pension stakes, which will result in them being considerably worse off in retirement, new research by Aegon has found.
A combination of the gender pay gap and time spent out of the workplace to raise children and act as caregivers means women build up considerably smaller saving pots than men.
The average 50-year-old woman has only half the saving of men – £56,000 compared to £112,000 saved by their male counterparts.
Aegon’s research shows that at age 30, women need to contribute an extra £21 a month to close the gap on men, but by the age of 50 this number rises to an extra £360 a month. The findings highlight how important it is to address any shortfall in savings as quickly as possible, the pensions giant said.
Kate Smith, head of pensions at Aegon, commented: “It’s shocking that 100 years after women secured the vote, we have a gender pay gap across every occupation. The fact that the pay gap filters down to mean women receive lower pension incomes is a double blow.
“When you factor in that women’s ability to save is further interrupted by breaks in their career to raise a family or care for elderly parents, the pension gap reaches epic proportions, making it difficult to catch up.”
Aegon’s research revealed that almost half of women (49%) said they were not confident about a comfortable retirement, compared to 33% of men. In addition, more than a quarter (28%) of women were unsure how much they had saved, compared to just 9% of men, and a worrying 42% of women admitted not thinking about how much they’ll need to save for retirement.
Smith added: “Gaps in pension savings history leave you worse off in retirement — but for women who take time out of their career this is unavoidable and could mean they have to work longer to make up the shortfall. However, the earlier women are able to address the shortfall, the better. Our figures show that women in the early part of their career are within touching distance of men’s overall savings – by the time pensions freedoms are an option, the pension pots of men are out of sight.”
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