Survey finds gender savings gap is growing

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Gender savings gap

Financial planning in association with Scottish Widows bannerThe savings gap between men and women when it comes to preparing adequately for retirement is widening, according to a new survey by Scottish Widows.

Over half of women (52 per cent) are now saving adequately for their retirement, but the gender savings gap with men is widening – with 60 per cent of men now setting aside the required amount.

Back in 2014 these figures stood at 50 per cent of women and 55 per cent of men.

The results, published in the latest Scottish Widows Women & Retirement Report, also revealed that women are more pessimistic than men – with 57 per cent concerned they are not preparing sufficiently for retirement, compared with 41 per cent of men.

Savings gap findings – self employed and part time women

Changing employment patterns appear to be influencing the ability of women to save for retirement – almost 1.5million women in the UK are now self-employed, a 22 per cent increase in the past four years, twice the rate of self-employed men.

Only 36 per cent of self-employed women are saving adequately for retirement, compared with 47 per cent of self-employed men and 58 per cent of employed women.

This trend looks set to continue as 62 per cent of self-employed women said they did not think they would be able to save any more in the next 12 months.

It seems women are also at a disadvantage when it comes to part-time working. With 16 per cent of UK women working part-time, many could be locked out of of auto-enrolment as it is only triggered via their employer when they earn £10,000 or more.

Savings gap findings – divorced women

Women also appear to be more negatively impacted by their personal circumstances than men, with only 42 per cent of divorced women saving adequately compared with 47 per cent of divorced men.

Divorced women have a bleak outlook on their financial futures, with 70 per cent thinking it is unlikely that they will be able to save more in the next 12 months than they do now – compared with an average of 60 per cent of women overall.

Savings gap findings – younger women

Younger women are the least optimistic of all about their retirement, with only 18 per cent of 18- to 29-year-olds feeling positive compared with 25 per cent of men in the same age group.

The findings suggest that a lack of understanding of retirement planning is to blame; 33 per cent of 18- to 21-year-old women claim that they would be encouraged to start saving if they had better access to information on pensions or retirement planning.

Meanwhile, 42 per cent of 22- to 29-year-olds would be encouraged if they could see the value of their pension alongside their other savings, either online or via an app.

Automatic enrolment could be a particularly effective for young female savers with 33 per cent of 22- to 29-year-olds saying it would encourage them to start paying into a pension, compared to 29 per cent of men.

Savings gap findings – expert reaction

Jackie Leiper, retirement expert at Scottish Widows, said: “It is encouraging to see that over half of women are making sufficient savings towards their retirement, but a growing savings gap persists in the UK.

“It’s vital that we address this to ensure women feel reassured about their finances and prepared for retirement, whether they are self-employed, work for a large employer, are divorced, married or single.

“More also needs to be done to make certain that automatic enrolment does not marginalise female savers who may not qualify for the threshold.

“And this means we need to engage innovatively with female millennial savers, who are just beginning to put money aside for their retirement.

“Our research shows they are crying out for information, and learning good savings habits now will help ensure they are better prepared for later life.

“Providers, employers and the government alike must also explore further initiatives to help women of all ages save in other ways if they don’t qualify for a workplace pension.”

 

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