Women workers are reversing the trend of a life of poverty in retirement by boosting their pension savings.
Around 85% of women workers are contributing to a pension compared to 63% in 2007, according to new data.
And most are putting aside a larger amount from their wages than men.
The move is reversing the stereotype of women relying on their partner’s income in retirement and their reliance on a state pension that will barely cover basic bills.
The research, by government-backed pensions agency NEST, found 3 million low-paid women earning between £10,000 and £14,000 a year have average pension account balances that are 20% higher than men on the same salary.
Bigger pension pots
Helen Dean, chief executive of NEST, said: “It’s clear that auto-enrolment is getting more women saving and in the process helping to tackle the gender pension gap.
“What’s particularly exciting is that when we adjust for earnings, our figures show women tend to contribute more than men and have higher pension pots.”
The latest figures – for 2017 – show 73% of eligible employees had saved into a workplace pension in at least three of the past four years.
These employees had managed to save £90.3 billion in 2017, up £4.3 billion from £86 billion in 2016.
Around 9.8 million workers are saving under auto-enrolment into a workplace pension.
Under auto enrolment, workers contribute 3% of their salary with a 2% top-up from their employer.
Hurdles stopping saving
In April 2019, this rises to a 5% of salary contribution for workers and a 3% employer top-up.
Pensions Under Secretary Baroness Buscombe said: “Expectations have changed with society fully embracing the benefits of saving for later life, and women are setting the benchmark here with bigger pension pots, as a proportion of their income.”
Nevertheless, critics argue this level is not high enough to provide a decent retirement income for millions of workers, even though payments will be topped up by the state pension.
“They need to save for their retirement for an assortment of reasons not least the fact that they tend to live longer than men. Women have always wanted to be responsible, but have faced several hurdles when it comes to putting away money, they have generally had less money than their male colleagues,” said former pensions minister Baroness Altmann.
