The money going into women’s workplace pensions has increased by 55 per cent since 2009, compared to just a 22 per cent increase for men over the same period, according to new government data.
Women accumulated a total of £52.0 billion in 2021, including £4.3 billion of tax relief on their pension savings, rising from £33.6 billion in 2009. In contrast men increased their annual savings by 22 per cent over the same period, reaching £62.6 billion in 2021. This includes £6.5 billion of tax relief.
On an annual basis, savings for men had a compound annual growth rate (CAGR) of 1.8 per cent while savings CAGR was nearly three times as high (4.6 per cent) for women.
These government figures were provided under a freedom of information request from Broadstone. The pensions and employee benefits consultancy says that if female pension savings continue to increase at the same rate, relative to men, this would mean there could be ‘pension savings parity’ by 2028 – with both accumulating around £71bn per annum.
Of course this would not mean that women start to retire with the same sized pension pots as men from this date, as for much of their working lifetime there would been a large discrepancy. Career breaks for childcare and eldercare and lower average pay rates are also likely to mean pension parity is still many years away.
Broadstone head of pensions and savings Rachel Meadows says: “Auto-enrolment has heralded a step change in pension saving in the UK, helping people build up pots for later-life who would have previously been excluded from the system.
“This has included younger savers, female savers and lower-income employees. It is great news that women are catching up their male counterparts when it comes to their annual contributions and could reach pension saving parity within the next six years.
“Building up sufficient pension savings to supplement the state pension is the best way of securing a good standard of living in retirement. Even though women are some distance behind men in terms of total pension wealth, matching their annual contributions demonstrates how auto-enrolment is changing the landscape for a new cohort of pension savers.”