Half Of Women Saving Too Little For Retirement

LESS THAN half of women are saving enough money for their retirement, but would be prepared to put more away if they could access at least part of their pension before they finished working.

Scottish Widows, which undertook the research as part of its fifth Women and Pensions report, is calling on the Government to introduce better pension saving incentives to encourage women to save harder.

In contrast, nearly two thirds of men are saving sufficiently for their retirement, meaning the gender gap has risen by 3 per cent from last year.

Ian Naismith, head of pensions market development at Scottish Widows said: "For women, trying to save consistently for retirement it is often difficult as many take time out of working life to have a family, and they may put their families' needs over and above their own.  While the Government has introduced measures in recent years such as allowing people to purchase missing National Insurance Contributions to help those with broken work histories, there is still more that can be done to narrow the gender pensions gap further by encouraging savings.   When it comes to pensions savings there really isn't a one size fits all approach and if more is done by both the Government and the industry we can help ensure that women can enjoy a comfortable retirement.”

Mr Naismith, said that one in five women would save more into a pension if they knew they could access part of it before they retired, something which could be accessed by developing ‘feeder funds’ so that you could build up an accessible pot of savings before you locked them into a pension fund.

This could be achieved by using individual savings accounts (Isas) which allow employees to make contributions into them.

Also, if it was possible to access pension funds before you reach age 50 – the current limit, which rises to 55 from next year – more women would be happier to use a pension as a savings vehicle, especially if they are on lower incomes.

Nearly two thirds of women aged 18-29 would like some face-to-face advice on pensions, but nearly nine in 10 overall would find information on the internet.

However, awareness of developments in pensions remains low, with less than a third of women who have not yet retired being aware of the planned Personal Accounts.

Part of the problem is that men and women approach pensions as part of an overall employment package differently, with location, flexi-time and maternity leave much higher up their list of priorities.

Mr Naismith said: “It's also up to women to take their retirement savings into their own hands.  The golden rule for pensions savings should be to put 12 per cent of income aside for retirement, but if women were given more encouragement to save that would help them achieve their retirement goals."

Men vs women - the pensions savings facts

• On average women who are members of defined contribution – where the amount you pay into the pension is at a set level, and the amount you get from it depends on the performance of your investments - 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 per cent) have access to a defined benefit scheme – where your employer sets the amount you will be paid when you retire, and takes the risk on how much that will cost, rather than relying on investment performance - compared to 41 per cent of men.
• Around a quarter of men with a private pension scheme are contributing to an individual personal pension compared to just 14 per cent of women - this has fallen from 17 per cent in 2008.
• On average women who could save more believe they could contribute nearly £83 more per month to long term savings compared to men who believe they could save £129 more per month.
• Some 38 per cent of women don't believe they can save anymore for retirement compared to 34 per cent of men.