Women’s pension pots could end up £30,000 smaller than men’s because they save less money each year,
Retirement saving for women is an average £776 a year less than men’s – adding up to a £29,800 shortfall for a 30 year old woman saving until she was 65, says a study by pension provider Scottish Widows.
The poll also showed fewer women save for their retirement than men – and the number is increasing.
Around 20% of men do not save for when they give up work, compared to 26% of women – a number up 3% from last year.
The financial firm describes this trend as worrying as the gap had closed in previous years.
Lack of financial confidence
In general, the Women and Pensions study also revealed women consider the recession has hit them harder – with half of women feeling financially worse off, compared with 45% of men.
This lack of confidence in the economy has led to women prioritising living expenses (42%), saving (31%) and debt repayments (31%).
On average, according to the research, women owe £10,922 excluding mortgages – up from £10,174 last year.
Lynn Graves, head of business development, corporate pensions at the firm said: “It has never been more important for the pensions industry, government and employers to raise awareness of this gender gap in retirement savings and help women prioritise their pensions.
“This ‘rainy day’ attitude reveals that many women view their savings as a pot to dip into to cover unexpected costs at any time and not as a fund to be ring-fenced and protected for the future to pay for retirement. Although there is a clear need to balance everyday living costs with unexpected expenditure shocks, this can’t be at the expense of women protecting themselves in old age.
Women more careful with their cash
“While women are right to focus on making sure their debts are manageable, other sacrifices may need to be made to ensure retirement planning is in place.”
Scottish Widows is not the only financial firm that believes women have to change their mindset to have a more comfortable retirement.
Research by Barclays Bank disclosed women are more careful with their cash than men because they see wealth as security for the family rather than a tool to make them wealthier.
And, says the bank, those that do invest are less likely to take risks with their cash – which is one of the signs of a successful investor.
So, although women tend to be more conservative investors, that very trait is the one that could make them money.