Pensions: Women failing to save for retirement

Tuesday, 30 October 2007 12:00

The pension gap is growing with women failing to save for retirement.

Only 41 per cent of women who could and should save for retirement are doing so, according to research by Scottish Widows.

This compares with 54 per cent of men earning over £10,000 a year.

However, over the last year the 13 percentage point gap between the sexes has widened by five per cent.

Furthermore 35 per cent of women of working age do not have a pension scheme, compared to 22 per cent of men.

"The outlook for women's pensions continues to be bleak," said Ian Naismith, head of pensions market development at Scottish Widows.

"Women need to remember that without their own pension scheme in place they could be left without anything for their retirement."

The pensions gap is being put down to wage gap - with government figures showing a 17 per cent hourly gender pay gap between men and women - meaning women are earning around £4,000 less on average a year.

Employers are also on average contributing less to women's pensions - with men receiving 6.5 per cent of their annual salary into employee schemes compared with 5.7 per cent for women.

Women are now being advised to be bolder about saving for retirement.

"If women don't want to tie up their money in a pension scheme then they should consider other options such as an ISA - then the money is available if it's needed for emergencies," said Mr Naismith.

"They also need to be bold in their investing. Far more women than men save only in bank accounts and cash ISAs, but over the long term an equity ISA or a pension is likely to give much better returns."

Today has also been named 'Women's No Pay Day' by the Fawcett Society and the public services union Unison, as the pay gap is the equivalent of men getting paid all year but women working for nothing from October 30th to year end.

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