Barriers increasing in pensions gender race

Women continue to lose out to men as the gender pensions gap widens according to the fifth annual Scottish Widows Women and Pensions Report - "Women's pensions today and tomorrow" as the financial crisis takes its toll. Over the past year fewer women are saving in to pensions, with over a quarter (26%) of those that could and should be, doing nothing to save for retirement (up from 22% in 2008) - this compares to just 15% of men. Only 47% of women are saving adequately compared to 59% of men and just 52% of women over 50 are saving enough, which has fallen from 57% last year.

Impact of recession on women's savings

One of the biggest consequences of the economic downturn has been the impact on the nation's pensions pots. 42% of women with a pension and not retired believe that the downturn has impacted the size of their pension pots and only 12% of women thought that their pension pot would be unaffected by the downturn, this compares to nearly one in five (18%) men. Not only this but the uncertain outlook for the job market has impacted women's savings; the number of women who believe that job insecurity/economic outlook will prevent them from saving in the coming year has doubled (currently 12%, compared to 6%).

While women are more conscious than men that they need to save for retirement (28% of women with a pension and not retired are aware they need to save more compared to 24% of men) this isn't actually translating into increased savings. In 2008, 48% of women aged 18-29 claimed that they were likely to save more towards retirement at some point over the next year, but only 22% have actually done so. Overall, 31% of women in 2008 said they intended to save more but only around one in six (16%) actually did. Over half of women (54%) feel less well off then they did 5 years ago, while men are slightly more upbeat with over a third (36%) believing they are better off than 5 years ago. Not only are women not saving enough for retirement but they also have more debt than men, on average women have around £1000 worth of extra debt than men (women have £12,156 in non-mortgage debt while men have £11,080 on average).

Ian Naismith, Head of Pensions Market Development, Scottish Widows comments: "During the economic downturn overall pensions savings have increased, but this is mainly among men and the gender gap has actually widened compared to last year. Although it is encouraging that women have the desire to put more aside for retirement, this doesn't seem to be translating into actual increased savings particularly and they also have more non-mortgage debt than men. Year on year our findings have exposed women as the pensions underdogs and in a climate when people need to be saving more than ever for their futures, it is worrying that women over 50 are actually saving less than previous years."

Family life takes priority

One of the main barriers to saving for women is having children and the impact on their lifestyle. Almost a quarter of women with dependent children (24%) have stopped or reduced pension contributions and other long-term savings in some way as a result of having children. In addition, women are almost twice as likely to stop pension contributions and long term savings compared to men, with over one in ten (12%) stopping all pension contributions because of starting a family, compared to just 7% of men. Many women's working patterns are also interrupted by having children, 82% of men aged 30-50 work full time, this drops to 47% of women of this age. Of those women not working, 39% are caring for children compared to just 23% of men.

Reliance on the state to fund retirement

While not working consistently means that many women will have to rely on the state to fund retirement, younger women are more realistic about having to provide for themselves when it comes to their futures. Only one third (35%) of women aged 18-29 think that the state pension would help them have a reasonable standard of living. Only 6% of women of this age think that the state will contribute most of their retirement income. But this doesn't mean that women believe they will be contributing to a pension scheme anytime soon. 44% of women with no private pension believe they will never pay into a private pension scheme and over a quarter (28%) of non-retired women have no private pension schemes (that they expect to receive an income from) compared to 22% of men. While fewer women will be directly hit by the demise of final salary pension schemes (only 34% of women with a private pension have a DB scheme compared to 41% of men), they may be indirectly hit as one third of men (32%) have a dependent spouse and this rises to 44% of men over the age of 50.

Ian Naismith, Head of Pensions Market Development, Scottish Widows comments: "There is a long way to go before women catch up with men when it comes to pensions savings but the issues of taking time out to have children and interrupted working patterns are never going to change. While it is encouraging that younger women accept that the state will not provide them with enough to fund their retirement, there is still more that women can do to save for their futures.

"It is also up to the Government and the industry to accept that women need a bit more flexibility when it comes to pensions savings. While progress has been made in this area there is still more than needs to be done such as placing more value on workplace pensions and enabling women to access funds before retirement which would better suit their lifestyles. While many women put their families first they need to take time to think about themselves and their needs when planning for retirement."

Men vs women - the pensions savings facts

On average women who are members of DC employer-arranged schemes are contributing nearly £90 a month compared to men contributing nearly £168

Of those contributing to a private pension scheme, women on average are contributing nearly £184 a month compared to men contributing nearly £331

A third of women (34%) have access to a DB scheme compared to 41% of men

Around a quarter of men (with a private pension scheme) (24%) are contributing to an individual personal pension compared to just 14% (D889) of women - this has fallen from 17% in 2008

On average women who could save more believe they could contribute nearly £84 more per month to long term savings compared to men who believe they could save £129 more per month

38% of women (D516) don't believe they can save anymore for retirement compared to 34% of men (C516)

Ian Naismith, Head of Pensions Market Development, Scottish Widows concludes: "For many women the issue of pensions is a vicious circle, but they need to try and prioritise saving for retirement even if they contribute less when they have children or change their working patterns. The golden rule is that people should save 12% of their income to ensure they have an adequate retirement. While many women focus on the present it is key that they also need to plan for their futures as well."