Despite the major strides made in recent years, financial inequality between the genders remains a huge issue in the UK. This is particularly true when it comes to retirement wealth.
According to a recent report published in Money Age, women would need to work a shocking 18 additional years of full-time employment to save as much money into their pension as men.
If you want to enjoy a comfortable lifestyle throughout your retirement, it’s important that you have enough wealth to support you throughout this period. That’s why a pension shortfall can pose such a major problem.
Thankfully, there are a few things you can do, so read on to find out more about the gender pension gap and three things you can do to close it.
The average woman retires with £136,800 less pension wealth than a man
Even though it has been more than half a century since the Equal Pay Act, there is still a major disparity between men and women when it comes to pension wealth.
According to a report published in Money Age, by the time women reach retirement age they will have an average of £69,000 in their pension funds. This is an incredible £136,800 less than the average man, who will have saved £205,800 in the same time frame.
The report also noted that, while the size of the average UK pension fund has nearly doubled to £111,600 in the past few decades, women’s savings have hardly improved at all. In fact, when you take into account the rising cost of living, they are arguably in a worse position than before.
This lack of pension wealth is especially problematic when you bear in mind that women also tend to live for longer than men.
According to data from the Office for National Statistics (ONS), the female life expectancy in the UK is 82.9 while the male life expectancy is only 79 – a difference of nearly four years.
This is a double whammy, as not only do women typically have less wealth, but they also need it to last for a greater amount of time.
If you’re concerned about what the gender pension gap could mean for you, read on to find out three things you can do about it.
1. Track down lost pensions
Since many people work a variety of jobs over the course of their lives, it can be possible to simply lose track of old pensions. In fact, according to research published in Pensions Age, there are an estimated 1.6 million “lost” or dormant pension pots in the UK, worth a total of £37 billion.
If you want to enjoy a comfortable retirement, it can be useful to ensure all these pots are working hard for you. That’s why you may want to get in touch with old employers to help find any pensions you may have lost track of.
If this doesn’t work, you can also use the government’s free Pension Tracing Service on their website.
2. Increase your pension contributions
If you’re concerned that you won’t have enough wealth to enjoy your desired lifestyle when the time comes to retire, you may want to increase your contributions.
As we discussed in a previous article, there are several easy ways that you can save more for the future. For example, increasing your workplace contributions can be a great way to boost the value of your pot, without making much difference to your quality of life now.
Unless you’ve opted out, you typically have to pay 8% of your salary into your workplace pension, of which you pay 5% and your employer pays a further 3%. But since this is only a minimum amount, you can choose to pay more in if you prefer.
This can be a great way to boost the size of your pension fund, especially since many employers offer to raise their contributions in line with yours, up to a point.
3. Work with a financial planner
When it comes to saving for retirement, seeking professional advice can really benefit you. A financial planner can help you to build your wealth in the most effective way, giving you more confidence that you’ll be able to reach your long-term goals.
For example, they might recommend that you reassess your tolerance to risk, as this may help your investments to grow more effectively. Of course, this can also pose greater danger to your wealth in the event of a market downturn, so it’s important to be able to make an informed decision here.
Working with a financial planner can help you to build your pension assets and give you greater confidence that you’ll be able to enjoy a comfortable retirement.
Get in touch
If you’re concerned that you won’t have enough to enjoy a comfortable retirement when the time comes, we can help. Email us at firstname.lastname@example.org or call 0330 320 5048.
The value of your investment can go down as well as up and you may not get back the full amount you invested. Past performance is not a reliable indicator of future performance.
A pension is a long-term investment not normally accessible until 55 (57 from April 2028). The fund value may fluctuate and can go down, which would have an impact on the level of pension benefits available. Your pension income could also be affected by the interest rates at the time you take your benefits.
Workplace pensions are regulated by The Pension Regulator.