A new report from Scottish Widows shows that the gap between the amount that men and women are saving for retirement has grown to a record level.
It says that because women earn less than men, are more likely to work part-time and are focusing on paying back existing debt, they are saving less for retirement than men.
The survey shows that many women will be forced to work into their 70's if they want to secure a reasonable pension income in retirement.
The report suggests women are saving £766 a year less than men, illustrating the growing gap in pension savings between men and women. This means that the difference in retirement savings habits between the sexes has increased by ten per cent in the past 12 months.
The gap has grown from a difference of £700 per year seen 12 months ago. The shortfall in pensions saving for women means that if a 30-year-old woman continued saving at the reduced rate compared to the average man, by the time she reached the age of 65 she would have £29,800 less in her pension pot.
The one bright spot revealed by the survey is that women who are already saving for their pension are reluctant to cut back on retirement savings. The survey suggests that if women had a ten per cent fall in income, they would cut back on food, clothing and going out and just three per cent would reduce their pension contributions.
Lynn Graves, of Scottish Widows said: “Important differences in lifestyle such as being more likely to work part-time or have a full-time caring role, mean women often find it more difficult to save for the long term and retirement.”
The report, that surveyed 5,200 people, said that more than a quarter of women are making no savings at all for retirement compared to a fifth of men and there is a difference in attitude towards pension savings with women seeing their pension savings as “a pot to dip into to cover unexpected costs” rather than ring-fencing the funds for their retirement.
Ros Altmann, director-general of Saga said: "If they have not been able to save, or have saved too little, they risk either having to stay working or being pretty poor.
"Our state pension partly depends on earnings, so those who earn least get the lowest state pension.
"This is clearly unfair to women, whose earnings are impacted by caring for others, which is a role that saves society huge sums.
"Therefore, we need urgent reform of the state pension system to ensure that even if women have lower private pensions than men, they don't then have lower state pensions as well."
Gregg McClymont, the shadow pensions minister, believes that the new auto-enrolment pensions system should have a lower threshold for employees to begin starting to save for retirement. Under the new system, an employee has to earn £8,105 before being enrolled. This means that many women, more of whom are part-time workers will miss out on the extra money put into their pension by the government through tax relief and their employer.
He said: “The pension savings prospects of hundreds of thousands of low paid women are being sacrificed by the Tory-led Government.”
The report said that 31 per cent of women are prioritizing debt repayment over pension savings. Debt levels excluding mprtgages for women have increased from £10,174 to £10,922 over the past 12 months. This has led to a reduction in pension savings for women from an average of £130 to £95 at the same time as a corresponding rise in pension savings amongst men, up from £174 to £185 per month.
The drop in saving for retirement amongst women of £35 a month would lead to a £16,000 shortfall in pension savings over a 35-year period.
Lynn Graves said: “While women are right to focus on making sure their debts are manageable, other sacrifices may need to be made to ensure retirement planning is in place.”
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