- Gender pension gap narrowest on record at just 1%, as proportion of women saving adequately hits new high of 59%.
- However, savings gap persists as the average man saving adequately would still be putting away £1,300 a year more than a woman, with the pandemic threatening to make this worse.
The gender pension gap has closed to just 1% ‐ the narrowest on record ‐ as more women are putting enough money aside for a comfortable retirement. Almost three in five (59%) women are now saving adequately, compared to 60% of men.
Despite this progress, the persistent pay gap and part‐time working ratio mean women saving adequately on the average wage are still saving £1,300 a year less than men, according to Scottish Widows’ latest Women and Retirement Report.
This means for a woman to save the same amount into her pension as a man, she will need to work an extra 37 years ‐ which would take her over the age of 100 if retiring at State Pension age ‐ a number that is likely to grow as the full economic impact of the pandemic is realised.
Young women struggling to save
Young women are among those struggling most to save for later life. Just 46% in their 20s are saving the recommended minimum 12% of salary. This compares to 56% of men the same age, and to almost two‐thirds (64%) of women in their 50s, showing that women do tend to save more as they get older.
However, not saving more while young means women miss out on the benefits of compound interest, which can help savings increase substantially over their working lives.
Automatic Enrolment has been a huge driver in getting more women to save for the long‐term, but there are still a number of structural challenges preventing a truly level playing field.
Women are still paid less than men, significantly impacting their ability to save. Of those in full‐time jobs, men earn on average £6,100 more a year, a figure that increases to £10,800 for all employment types*.
Extra commitments such as childcare also tend to fall on women, reducing the number of hours they are able to work and therefore limiting earnings. In 2020, three‐quarters (75%)** of all part‐time workers in the UK are women and the majority of UK families with a child under four consist of a father working full‐time and a mother working part‐time.
These challenges are likely to have been amplified by the pandemic as women are more likely to be working in shutdown industries, such as the hospitality trade, where many have been furloughed, seen their hours reduced or been made redundant.
About the research
This article was published by Scottish Widows based on research carried out online by YouGov Plc across a total of 5,757 adults aged 18+. Data was weighted to be representative of the GB population. Fieldwork was carried out 26th March – 11th April 2020. An additional survey was carried out online by YouGov Plc across a total of 2,251 adults aged 18+. Data was weighted to be representative of the GB population. Fieldwork was carried out 11th March – 12th May 2020.
YouGov Plc between 7th and 15th September 2020. Respondents were recruited from YouGov’s online panel and were incentivised by online retail vouchers.
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