Women are significantly underestimating their reliance on the state pension before retirement, new research from Aegon has revealed.
According to Aegon’s “Second 50” research, 38% of working women expect the state pension to be a significant or their only source of retirement income, but this figure jumps to 54% of women when in retirement.
Aegon warned that the findings highlight a worrying trend that many women may be realising the financial realities of retirement too late.
The data also revealed a significant gender disparity in retirement confidence. A third (33%) of men anticipate that the state pension will be a significant or their only source of retirement income, however, just 28% of retired men reported the same.
Furthermore, just one in three retired women (32%) said they feel extremely or very confident in always being able to live a comfortable lifestyle in retirement, compared to 46% of retired men.
The retirement specialist said data recently released by the Office for National Statistics found that those with dual responsibilities for dependent children and adult relatives are also falling behind when it comes to saving for retirement with more than half (53%) of carers unable to work at all or as much as they would like due to their caregiving responsibilities. Additionally, 61% of carers are women, further underscoring the gender imbalance.
Kate Smith, head of pensions at Aegon, said the findings should serve as a wake up call.
“The stark reality is that women are disproportionately affected by financial insecurity in retirement. This disparity shows that many women may have fewer savings and might have prioritised immediate financial needs over long-term planning, potentially leading to greater financial dependence on their partners,” said Smith.
“State pensions play a vital role for nearly everyone but they should not be the sole source of retirement income. It is essential for women to engage in both independent and joint financial planning.”
Aegon has published a new guide aiming to shine a light on the significant impact that confidence and security in later life have on women’s decision-making. “The Second 50: Addressing the gender pensions gap” offers practical tools and strategies to help women prepare financially and mentally for their later years.
