The number of women saving for a pension has increased by 50% in recent times. However, theyíre still £700 short of men.
The annual ëScottish Widows Women and Pensionsí report suggests that the number of women saving sufficiently for retirement has hit a seven-year high. 50% of women are saving adequately compared to 43% in 2010.
As a result of this, the gender pay gap for pension pots is closing. The Scottish Widows Pensions Index found that the number of women saving adequately for their pensions has increased by 7% in 2010, compared to an increase of just 1% for men over the same period.
Women are now saving a higher percentage of their income compared with men, 12.9% to 12.6% respectively, yet the gender gap remains.
Men, however, typically earn more than women and are able to set aside more. In fact, the research found that men are saving as much as £700 more every year!
This creates a difference of almost 20% between male and female pension pots as men save an average of £28,091 compared to £22,490 for women. To add to this, 23% of women save nothing at all towards their pension compared to just 17% of men.
“Many women will spend a proportion of their career working part-time and will also face challenges of lower pay, higher childcare costs and growing unemployment, so despite their best efforts this will have a knock on effect on their financial decisions and savings for retirement,” commented Ian Naismith, Head of Pensions Market Development at Scottish Widows.
The generation gap is growing and 56% of women aged 51 and over are saving more adequately for retirement compared to 46% of women aged between 30 and 50 years old.
Younger women have shown signs of financial independence as they understand that the government won’t be able to cover their retirement. Only 12% of women under the age of 30 assume that the government will contribute most of their income in retirement, compared with 28% of women over 50.
Compare pensions with Money Expert.