Yet another report is telling retirement savers what they already know – that they are not saving enough and women are struggling to fund their pensions.
Most people have received the message by now and have either picked up on their saving or are in denial about their financial futures.
But the latest report from the World Economic Forum, a think tank funded by private investors and corporations, puts some global numbers on just how large the savings gap yawns for retirement savers.
Everyone needs to save an extra $400 trillion by 2050 or risk falling short of their target retirement income of 70% of what they earn while working.
The WEF already tracks the gap across seven countries.
In 2015, the total deficiency was $70 trillion and growing wider at a rate of 4% or 5% a year in Australia, Canada, Netherlands, UK and USA, but 7% in China, 10% in India, but just 2% in Japan.
Women struggling to save
Women are finding that plugging the savings gap is harder for them because they tend to earn less and take career breaks to raise families.
“Women have the pension odds stacked against them, so we need governments and employers to help even the playing field,” said WEF spokesman Han Yik.
“If women follow the same retirement plan as men, they fall short because on average they earn less and work fewer years. If they follow a more aggressive savings plan, they further lower their take-home pay, increasing the net pay gap.”
Across the European Union, pensions for women are an average 37% smaller than those of men, although the gender pay gap is 16%.
The WEF suggests governments examine how they can help women who take time out of work to look after children or care for relatives. This could mean offering pension credits or removing caps on pension contributions for those who want to make up lost years of saving.
The pension savings gap – now and in 2050
Source: World Economic Forum
