The staggering amount women need to save to match men’s retirement funds exposed

Pension provider Scottish Widows has said women need to nearly double how much they save for later life every month to bridge the ludicrous savings gap. The report found women need to put away £495 per month from their 20s to the day they leave work to bridge the incredible £185,000 savings gap.

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The depleted savings is down to a number of factors, including taking work breaks to raise children, the fact women on average live longer, the cost of later life care, and women often earn less than men.

Georgie Burks, Head of Brand Marketing at Penfold, explained women earn considerably less during their working lives due to a range of largely unavoidable factors.

She told “Research shows that women earn on average 35 percent less than men during their working lives, so even if they saved the same proportion into their pension as men, they would still end up with less in their pots.

“This is partly because women are more likely to have careers breaks or work part-time which worsens the gender inequality when it comes to saving for retirement.”

Women need to save an extra £50,000 to cover income for the extra years.

What’s more, women could need £35,000 to pay for care as data shows they spend 460 days in care homes on average, compared with just 100 days for men.

The gender pay gap is also at fault for women not having enough to retire on.

Women who leave work to raise children or take on other care responsibilities forgo a huge sum of their potential later life funds.

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A woman who takes a five-year career break loses out on an average of £65,000, according to stockbroker AJ Bell.

If a mother took two years off and then returned to work on a part-time, three day work week, they would find themselves around £158,000 worse off than if they had returned to work full time.

Ms Burks says the pensions industry needs to change to help women – starting with helping women understand how their pension can be different to a mans.

She told “To help women save more into their pension, the industry needs to change.

“Pension providers need to offer more flexibility in terms of how and when women pay into their pension.

“It’s time to recognise that a one-size-fits-all approach doesn’t work anymore.

“Women need an accessible pension with a flexible contribution system so they can adjust their payments and choose how much they’re saving at any time.

“For example, during a career break, when women may have less disposable income, they should be able reduce their payments and increase them when they return to work.

“Helping women to set realistic savings goals and maintain some level of contributions into their pension during career breaks is the best way the pension industry can support them in achieving the retirement they deserve.

“We must do more to educate women on why pensions are so important so we can encourage them to take a more active role in saving for their future.”

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