Women Have Around Half the Pensions of Men
The amount of money that people are putting away for their retirement has been an issue of concern to the UK government for some time now. Although recent reforms to the pension system have allowed people more control over how they invest or use their pension pots, the worry that people are going to find themselves severely underfunded during their retirement years is a big one.
According to recent reports from the TUC, this potential problem may be of even more concern to women than it is to men, due the the difference in the amount they have saved or invested in their occupational pension schemes.
Women Have Half the Pensions of Men
The report from the TUC – the National Trade Union Centre in the UK – suggests that women could be facing a financially tough time during old age if swift action isn’t taken to address the difference between how much the average woman typically has in her occupational pension scheme compared to the average man. The TUC report states that, on average, women only have around half the amount of money in their defined contribution pension schemes as men do, with men having an average of £14,500 and women only having an average of £7,500.
The situation is similarly problematic when it comes to defined benefit (or final salary) schemes too, with the average woman only having £32,000 in this kind of scheme compared with £62,900 for the average man.
To compound the problem even further. The research – which was conducted by the Pensions Policy Institute – also highlights that women tend to receive around 25% less than men from their state pensions too, leaving them out of pocket by around £2,548 per year.
Why the Gap?
Research from the past suggests that one possible reason for the gap in pension savings between men and women is that, because more women than men tend to work part-time, they are more likely to opt out of auto-enrolment schemes.
What Can You Do?
If you are worried about the amount of money you currently have saved in your pension pot, then what can you do about it? The first thing would be to recognise that retirement is something that is likely to sneak up on you a lot quicker than you think it will, so the time to act is now. If you are currently employed, then you could have a chat to your employer about increasing your contributions into your workplace pension scheme and asking if they will match any of your contributions, or even discuss opting in to an existing workplace pension scheme if you need to do so. If you would prefer to take matters into your own hands, then you could look into setting up your own SIPP (Self Invested Personal Pension). It would also be wise to make the most of your annual tax-free ISA allowance by investing in a Stocks & Shares ISA, Cash ISA, or both if you would prefer a mix of the two.
Are you concerned about the amount of money you are putting away for retirement?