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Widening of gender pension gap is prompt to increase savings

31 October 2018

As of 6 November, men and women will receive their pension from the same age, bringing to an end over 70 years of women receiving their state pension earlier than men.

While it is a step forward in breaking down gender discrimination, Aegon has warned that this move will make the gender pension gap worse.

The life assurer points out that, on average, women have far less in their private and workplace pensions than men, but receiving the state pension at an earlier age offered some compensation for that discrepancy.

Aegon’s research shows that by the time women reach age 50 they have only half the pension savings (£56,000) of men who will have saved on average £112,000. To try and close this gap, women need to contribute an extra £21 a month at age 30, rising to an extra £360 by age 50. Not surprisingly, half of women (49%) say they’re not confident about a comfortable retirement, compared to 33% of men, according to Aegon.

Following on from a protest by members of the Women Against the State Pensions Inequality group during Chancellor Hammond’s Budget on Monday, Steven Cameron, pensions director, Aegon, said: “Our figures show just how far women are behind men when it comes to saving for retirement. On 6 November this gender pensions gap will become even wider as the women’s state pension age rises to age 65, bringing it up to the male age. While some may see this as a step forward towards equal treatment, it actually means women are a further step back compared to men with pensions.”

Cameron added: “While limited progress is being made to close the gender pay gap, other factors impacting women’s ability to save adequately for retirement including career breaks to raise a family or to care for elderly parents, aren’t going anywhere.

“The equalisation of state pension age, and future planned increases are a further prompt to women to think about how much they’ll need to save privately for a comfortable retirement.”

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