Women's pensions savings hit record high
- Published on Tuesday, 01 November 2011 11:07
- Posted by Scott Buckler
The seventh annual Scottish Widows Women and Pensions Report 2011 reveals that the number of women saving adequately for their retirement has reached the highest level in the report’s history, with 50 percent of women saving adequately for retirement, compared with 43 percent in 2010
Yet despite this new high, men are saving as much as £700 more than women each year due to a disparity in income levels.
The new findings show that when women are saving they put aside on average 12.9 percent of their income, including any employer pension contributions. Men by comparison are saving less, 12.6 percent of their income. However, men are able to save significantly more for retirement as they typically earn higher salaries, £28,091 for men compared to £22,490 for women, a difference of nearly 20 percent. Many women are saving nothing at all – 23 percent, compared with 17 percent of men.
Based on a sample of 5,200 adults, the report found that the gap between the number of men and women saving for retirement is closing, now at just 3percentage points, down from 9 percentage points in 2010. However, we are seeing a growing disparity between the ages with 56 percent of women aged over 51 saving adequately for retirement, compared to 46 percent of women aged between 30 ‐ 50.
Ian Naismith, Head of Pensions Market Development at Scottish Widows, said: “It is encouraging to see a positive step change in the number of women saving adequately for retirement, especially given the challenging economic climate, but the gender gap still exists. “Many women will spend a proportion of their career working part‐time and will also face challenges of lower pay, higher childcare cost and growing unemployment, so despite their best efforts this will have a knock on effect on their financial decisions and saving for retirement.” Gender gap is closing but savings need to increase
The good news is the number of women saving adequately for retirement has significantly increased in 2011. The Scottish Widows Pensions Index, which shows the number of women saving adequately for retirement, has increased by seven percentage points compared with 2010. There was just a one percentage point increase for men. The average man who is preparing for retirement saves £4,158 a year, compared to £3,457 a year for women, both figures include any employer contributions into their pensions. 71 percent of women say they can’t afford to save long term, compared to 60 percent of men.