Gender pensions gap narrows to just 1% but 'still a mountain to climb' - Scottish Widows study
The gender pension gap has closed to the narrowest on record but considerable challenges remain, according to new research by Scottish Widows.
The study found that 59 per cent of women are now putting enough money aside for a comfortable retirement, compared to 60 per cent of men.
Despite this progress, the persistent pay gap and part-time working ratio means women saving adequately on the median wage are still saving £1,300 a year less than men, according to the financial firm’s Women and Retirement Report, published today.
It means that for a woman to save the same amount into her pension as a man, she would 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, researchers noted.
Jackie Leiper, managing director, workplace savings at Scottish Widows, said: “While we’re heartened at the record levels of saving, there’s still a mountain to climb before we reach true gender pension parity.
“Women face decades of extra working before they’ll have a pension to match that of a man’s, which is unfair and unacceptable. Until we can resolve structural inequalities, from the gender pay gap to the uneven division of labour at home, we will never have pension equality.”
Young women are among those struggling most to save for later life, according to the report.
Some 46 per cent of those in their 20s are saving the recommended minimum 12 per cent of salary. This compares to 54 per cent of men the same age, and to almost two-thirds (64 per cent) 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.
The research was carried out online by YouGov across a total of more than 5,700 adults. A supplementary survey was carried out by the same polling firm involving some 2,250 people aged 18-plus.
The study highlighted a number of “ongoing challenges”.
Automatic pensions enrolment has been a major driver in getting more women saving for the long-term, but there are still a number of structural challenges preventing a truly level playing field, Scottish Widows noted.
Women are still paid less than men, “significantly impacting their ability to save”, it argued. 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.
As part of its research, the firm spoke to a group of women about how the pandemic was affecting their working life and pension prospects.
Leiper added: “In a matter of months the pandemic is reversing years of progress. We’re calling for urgent pension reforms that will help more women save more for retirement, including improved childcare provisions, enhanced pensions for those on maternity leave, the inclusion of pensions in divorce proceedings, and the scrapping of the auto-enrolment minimum earnings threshold.”
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