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05 Mar 2018

Women more likely to opt out of workplace pensions

Women of all ages are more likely to opt out of workplace pension saving compared with men, new research suggests.

An analysis of NOW Pensions´ members at the end of 2017 revealed that nearly one in ten women (9%) had opted out, compared to 7% of men.

Women are increasingly likely to opt out as they get older, with the figures showing that only 62% of those aged 60-64 years remain in their workplace scheme compared to 70% of men. The overall opt-out rate for 60-64 year olds is 33%.

Men aged 22-29 are least likely to opt out of workplace pension saving, with just 3% opting out. This compares with 5% of women in the same age group.

Recent research by Aegon revealed a considerable gap between men and women´s pension savings, resulting in a gender divide which means that women tend to be worse off in retirement.

By the time they reach the age of 50, women have on average only half the pension savings — £56,000, compared to £112,000 saved by men.

Commenting on the latest findings, Troy Clutterbuck, interim chief executive of NOW Pensions, said: “The data shows two clear trends. Firstly, women across all age groups are much more likely to opt out of pension saving than men. Secondly, as people get older, their propensity to save into a workplace pension rapidly declines.

“The reasons for this behaviour are undoubtedly far from simple. It might be that older people think it´s too late or don´t believe there´s any benefit of being in a workplace pension as they get close to retirement. It could be that they already have enough put aside.

“For women, who are more likely to be part-time workers and lower earners, it might be that they simply don´t feel they can afford it.

“For these groups, arguably more needs to be done to drive home the value of the employer contribution, tax relief and the tax-free lump sum.”

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