Women are the pensions underclass

Women are the pensions underclass with fewer saving for their retirement than men and even those who do are saving less than men, new research from Prudential shows. The research found 60 per cent of working age women are not currently contributing to a company or personal pension scheme compared with 46 per cent of men.

Those women who do save are putting away an average £236.54 a month compared with £304.56 on average for men which is a difference of 22% per month. For a woman, this would equate to £42,577 over their lifetime, which would give them an income of £3,603 for the rest of their retirement. Taking this into consideration, it’s not surprising to see that the research highlights that five times as many men as women are banking on private pensions of between £15,000 and £19,000 a year

Worringly, the research also reveals one in five women have no additional means of boosting their pension compared to just one in 10 men – the average for the country is 13 per cent.

The glaring gulf between pension provision and saving by men and women means millions of females will go into retirement either having to rely on a partner or facing a struggle to maintain basic standards of living, Prudential warns.

The Bigger Picture

The savings and retirement giant is however urging men and women to think more widely about how to fund their retirement by focusing on all sources of financial help available to them such as benefits, property, other savings and pensions.

Gary Shaughnessy, Managing Director, Prudential Retail Life & Pensions, said: “Women are the underclass when it comes to pensions. Women clearly play a vital role in the workplace but this is not being reflected in the pensions they can expect.

“With more people choosing to live alone and the number of divorces at high levels it is undeniable that individuals cannot rely on partners for their retirement finances. However, this doesn’t mean everyone should forget about saving and planning for their retirement as it’s never too late to start saving for retirement.

Retirement is now roughly 25 years long for the average person, so people need to not only review what their pension will deliver, but also think about all the other sources of wealth available to them, such as property and other savings.”

Individual Savings

Prudential’s Datamonitor Report shows total average savings held by women in Great Britain last year was £17,532 including equity in their home. The so-called Baby Boom generation aged 50 to 60 are estimated to hold £542.6 billion of home equity, which is expected to grow to £1.425 trillion by 2020.

Examining finances in the round would enable women to supplement their retirement income from their house as well as claiming benefits and cutting everyday bills, Prudential argues.

However women can at least claim one victory – they are much more switched on when it comes to the State Pension. The average man believes he’s heading for a State Pension of £146.61 a week when the basic State Pension is £87.30. The average woman estimated it at £89.09 a week.