Women feel less confident about pensions and retirement planning than men, despite contributing to their pension pot earlier than their male counterparts, new research has shown.
According to a study by Wealthify, two-fifths (42%) of women begin contributing to a pension before the age of 24, compared with a third (33%) of men.
While this early start could provide an advantage in the long run, Wealthify said women are likely to feel held back by a lack of confidence and understanding around pensions.
More than one in 10 (12%) say a lack of knowledge has delayed or stopped them from contributing more to their pension, compared with 8% of men. Furthermore, a fifth (21%) wish they had learned how pensions work earlier in life and nearly two-thirds (64%) wish they had taken their pension more seriously when younger.
Women are twice as likely as men to say they don’t understand any pension terms at all (24% versus 12%), and show lower understanding of several key terms that regularly feature in pension paperwork and policy debates. For example, just 9% of women understand “volatility” compared with 21% of men, while “triple lock” is understood by 10% of women and 21% of men.
Wealthify said a lack of understanding around key terms potentially risks leading to more cautious and potentially less beneficial decisions about contributions, investments and withdrawals. Without confidence in what the terms mean and making further contributions to their pension pot, the financial advantages of an early start may not translate into stronger outcomes later in life, the firm warned.
Jessie Kwok, chief investment officer at Wealthify, said: “Confidence and knowledge go hand in hand. If someone doesn’t understand the terminology in their pension paperwork, they could be more likely to second-guess themselves or make overly cautious decisions. That could mean missing out on valuable allowances, delaying contributions, or feeling unable to take control of their financial future.
“The good news is that this is a gap we can close. By explaining pensions in plain English and making education accessible, we can help women build confidence and ensure their early saving habits truly pay off when it matters most.”
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