Barriers Increasing In The Pensions Gender Race

Women continue to lose out to men as the gender pensions gap widens according to the fifth annual Scottish Widows Women and Pensions Report – "Women’s pensions today and tomorrow" as the financial crisis takes its toll.  Over the past year fewer women are saving in to pensions, with over a quarter (26%) of those that could and should be, doing nothing to save for retirement (up from 22% in 2008) – this compares to just 15% of men.  Only 47% of women are saving adequately compared to 59% of men and just 52% of women over 50 are saving enough, which has fallen from 57% last year.

Impact of recession on women’s savings

One of the biggest consequences of the economic downturn has been the impact on the nation’s pensions pots. 42% of women with a pension and not retired believe that the downturn has impacted the size of their pension pots and only 12% of women thought that their pension pot would be unaffected by the downturn, this compares to nearly one in five (18%) men.  Not only this but the uncertain outlook for the job market has impacted women’s savings; the number of women who believe that job insecurity/economic outlook will prevent them from saving in the coming year has doubled (currently 12%, compared to 6%).

While women are more conscious than men that they need to save for retirement (28% of women with a pension and not retired are aware they need to save more compared to 24% of men) this isn’t actually translating into increased savings.  In 2008, 48% of women aged 18-29 claimed that they were likely to save more towards retirement at some point over the next year, but only 22% have actually done so.  Overall, 31% of women in 2008 said they intended to save more but only around one in six (16%) actually did.  Over half of women (54%) feel less well off then they did 5 years ago, while men are slightly more upbeat with over a third (36%) believing they are better off than 5 years ago.  Not only are women not saving enough for retirement but they also have more debt than men, on average women have around £1000 worth of extra debt than men (women have £12,156 in non-mortgage debt while men have £11,080 on average).  

Ian Naismith, Head of Pensions Market Development, Scottish Widows comments: "During the economic downturn overall pensions savings have increased, but this is mainly among men and the gender gap has actually widened compared to last year.  Although it is encouraging that women have the desire to put more aside for retirement, this doesn’t seem to be translating into actual increased savings particularly and they also have more non-mortgage debt than men.  Year on year our findings have exposed women as the pensions underdogs and in a climate when people need to be saving more than ever for their futures, it is worrying that women over 50 are actually saving less than previous years."

Family life takes priority

One of the main barriers to saving for women is having children and the impact on their lifestyle.  Almost a quarter of women with dependent children (24%) have stopped or reduced pension contributions and other long-term savings in some way as a result of having children.  In addition, women are almost twice as likely to stop pension contributions and long term savings compared to men, with over one in ten (12%) stopping all pension contributions because of starting a family, compared to just 7% of men.  Many women’s working patterns are also interrupted by having children, 82% of men aged 30-50 work full time, this drops to 47% of women of this age.  Of those women not working, 39% are caring for children compared to just 23% of men.