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Estimated financial gap between men and women’s private pension But retirement That’s an increase from last year, a new report has revealed.
scottish widows Women are estimated to retire with an average personal pension wealth of £173,000.
This figure is £113,000 less than the estimated average of £286,000 for men.
This growing disparity represents an increase from £100,000 gender difference Private pensions are calculated only twelve months before retirement.
Scottish Widows estimates people’s retirement income based on certain assumptions about their current assets, their savings behaviour, and factors such as how their income is expected to grow during their working lives, and when they will retire.
Because women often take on caregiving responsibilities, the research also indicates that more than half (58 percent) of women have taken a career break at or near retirement, compared to 12 percent of men who have done so.
It also found that two-fifths (40 percent) of women did not plan financially for their career break, and more than half (56 percent) never thought about how it would impact their retirement.
The report said that while caring for children is the “exceptional explanation” for career breaks, health and menopause also play a role.
The report found that women who took a career break were more likely than men to say it had reduced their ability to save.
It also found that women are more likely to not be meeting even a minimal lifestyle after retirement, with 36 percent of men estimating they are not on track, compared to 31 percent of men.
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The forecast is benchmarked against a set of “retirement life standards” set by industry body Pensions UK.
Suzanne Hope, retirement expert at Scottish Widows, said: “To achieve true equality in retirement, we need to ensure that career breaks do not derail women’s future financial security.
“There are some direct ways to help address these gendered pension concerns.
“We need to increase awareness of and adoption of shared parental leave policies.”
He added: “Separately, if possible, spouses should actively save into the woman’s pension during any career breaks.
“This is also known as a third-party contribution and, although often overlooked, is a helpful financial planning tool.
“Not only can this maximize tax relief for those who have used up their allowance, it can also help to bridge the gap in pension contributions while earning power is limited.
“Employers also continue to play an important role in pension contributions during maternity leave.
“Fortunately for women, employer contributions to a workplace scheme are often calculated based on their pre-leave pay.”
YouGov surveyed more than 4,000 people across the UK in August and September and more than 5,100 people in January and February for Scottish Widows.
Helen Morrissey, head of superannuation analysis at Hargreaves Lansdown, said: “Women are paying a heavy price for taking on the majority of caring responsibilities when it comes to pensions.
“The mix of low pay, part-time work and working gaps all conspire to deepen the gender pension gap and without workplace reforms there will be little women can do to help them remain in the workforce.
“This could include the provision of good quality affordable childcare and more flexible working which will enable them to balance caring and work responsibilities more easily.
“It also shows the huge impact that menopause can have on women’s retirement prospects. At a time when they may be in a position to begin rebuilding their long-term resilience after being out of the workforce and having lower wages, menopause is likely to cause further damage.
“Again, a more flexible approach towards working patterns could be a gamechanger in helping women cope with this challenging time and build their financial resilience.”