Pay equality has been addressed in recent years but retirement income is often overlooked. It’s vital that women don’t fall into the pension pay gap that affects them much more than men.
The numbers are a real eyeopener. For various reasons, women still reach retirement age and have less money invested in their workplace pensions than men.
In fact, the average value of these private pensions is around one third of the sum accumulated by men. By their 60s, women have accrued about £51,100 while men enjoy a pot of about £151,500.
Incredibly, some are in a worse financial position. According to research by workplace pensions provider Now Pensions, around 1.2 million women in their 50s have no private pension wealth. They will rely mostly on state pensions.
Why does the pension gap exist?
One of the core reasons for the pension gap is that women save less into their pension. They still earn less than men. While progress is being made, ONS data shows that the gender pay gap is around 9% for permanent positions in the UK.
Unfortunately, women also fill more part-time roles than men. When this group is considered, the overall gender pay gap rises to around 17% across all employees.
Part-time workers tend not to progress up the pay scales like permanent workers. Hours can also fluctuate, and that means sticking to regular savings is difficult.
When you add factors such as childcare requirements, career choices and even union representation, women come off worse than men. All still result in women earning less and being able to save less than men.
Much also hinges on confidence. Close Brothers research shows that a mere third of women (35%) believe they are confident enough to select the most suitable financial product(s) to achieve long-term savings goals. That contrasts with 50% of men.
Logic Wealth Planning aims to put that right by empowering everyone we advise.
Pension actions for women
Both the gender pay gap and the gender pension gap will close over the long term. To speed this up in the UK, further government legislative intervention is required.
Automatic enrolment contributions will rise, and the single-tier state pension will eventually make things more even.
However, women can and should put matters in their own hands. Getting good independent financial advice is a great starting point. The information is available to help them make informed investment decisions.
Also, knowing how much needs to be saved to finish work with enough funds to enjoy a comfortable retirement requires thorough planning.
Logic Wealth Planning is here to offer that guidance. We listen, understand and work closely with clients to achieve the best possible outcomes.
Please be aware the value of investments or income from them can fall as well as rise. We’re here to help you make informed decisions.
Call us on 0808 1234 321 or email firstname.lastname@example.org to discuss pension planning that aims to avoid the gender disparity at retirement age.
* Logic Wealth Planning provides independent financial advice in Manchester, Bury, Rochdale, Cheshire and the surrounding area, but not limited to the region.