The gender pay gap and time spent caring for children means women’s pensions are on average half that of men’s by age 50, and they will fall further behind for the rest of their career, figures from Aegon show.
By age 50 women can expect to have saved £56,000, compared to £112,000 saved by men. A 50-year-old woman would need to pay an extra £360 a month to catch up with her male counterpart, the provider’s research shows.
The research, which was conducted with 2,000 adults, shows a significant gap between men and women’s saving pots that will grow dramatically with age, resulting in a gender divide in pensions income that will leave women considerably worse off in retirement.
The gender pay gap, disrupted working patterns caring for children and other factors means women are less confident about retiring comfortably, with 49 per cent saying they are not confident about a comfortable retirement, compared to 33 per cent of men, the survey found.
Recent figures from the Office for National Statistics show the gap for full-time workers remains small at younger ages, but from age 40 onwards the gap widens reaching its peak between ages 50 to 59, the period when many people make their most significant pension contributions.
The gender pay gap is narrowing but is still significant. Between 2011 and 2017, men’s pay has grown by 10.4 per cent from £13.12 to £14.48 per hour whilst women’s pay has grown by 12.0 per cent from £11.75 to £13.16 per hour. In 2017, men on average were paid £1.32 more per hour than women, which, as a proportion of men’s pay, is a pay gap of 9.1 per cent, according to the ONS.
Women are less clear about what they need to do to get their savings on track, the research shows, with 28 per cent not knowing how much they have saved, compared to 9 per cent of men. The research found 42 per cent of women have never thought about how much they will need.
Aegon head of pensions Kate Smith says: “It’s shocking that 100 years after women secured the vote, we have a gender pay gap across every occupation. The fact that the pay gap filters down to mean women receive lower pension incomes is a double blow.
“When you factor in that women’s ability to save is further interrupted by breaks in their career to raise a family or care for elderly parents, the pension gap reaches epic proportions, making it difficult to catch up.
“Gaps in pension savings history leave you worse off in retirement — but for women who take time out of their career this is unavoidable and could mean they have to work longer to make up the shortfall. However, the earlier women are able to address the shortfall, the better. Our figures show that women in the early part of their career are within touching distance of men’s overall savings – by the time pensions freedoms are an option, the pension pots of men are out of sight.”