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03 Aug 2016

Women still aren´t closing the pensions savings gap

New research has highlighted that the gender savings gap is an ongoing problem for UK pensions, with women failing to save enough money for their desired retirement, the Money Facts website reports.

According to recently released figures from Aegon UK, just 10% of women are on course for achieving the retirement income they would like. The good news is that this figure has doubled from the 5% in last year´s survey - before the 2016 pensions reforms were introduced - but it still falls short of the 14% of men who are on track for their necessary retirement income.

The pensions gap is also evident when looking at the size of the average pension pot. Women are saving £85 less each month than men, meaning they put aside £1,020 less over the course of a year. On average, women´s pension pots are less than half of men´s with women putting aside £20,000, compared to men who have on average £52,500 put away.

Women also seem to be less actively engaged in saving for their retirement, with the report finding that just 21% of women and 27% of men have checked how their pension is performing in the past six months. A quarter (25%) of men have taken measures to review their retirement plans, compared to just 19% of women.

The findings show that while the savings gap has narrowed, there´s still a long way to go before women can expect to enjoy the same financial comfort during retirement as their male counterparts.

On a positive note, the pension reforms introduced in April this year seem to be having a positive impact. As a direct result of the changes, women are now saving 14% more into their pensions, while men are saving 16% more.

However, Kate Smith - head of pensions at Ageon - warned that despite some encouraging signs for women, “the truth is that their expectations are simply not lining up with reality.”

“The value of women´s pension pots is well under half of their male counterparts but they currently expect to retire aged 63, a year earlier than men, [and this] target retirement age comes against a backdrop of an increasing state pension age for women,” she added.

Smith also stated that the Government and businesses alike need to make pensions and auto-enrolment a priority, urging them to do more “to ensure that women, who often face a disrupted working life, are given the support to help them save more.”

Copyright M2 Bespoke 2016

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