Single mothers are £246,000 worse off compared to the average couple, according to new research from Scottish Widows.
According to Scottish Widow’s Women and Retirement Report, this shortfall includes all assets, including pension funds, which for lone parents—nearly 90 per cent of whom are female—average under £15,000. In the UK, the average marriage with dependent children has total assets worth over £275,000, yet single mothers only have an average fortune of £29,000. This results in a roughly quarter-million-pound wealth discrepancy between the two groups and serves as just one illustration of the growing difficulties women are facing while saving for the future.
The research shows that women of all ages are less likely than males to be saving for retirement, but single mothers exhibit this behaviour the most clearly. Compared to 29 per cent of all women, 40 per cent report that they do not have a pension.
Single-parent households typically spend more relative to their disposable income than couples do, around 87 per cent of their average disposable income, compared to over two-thirds for two-parent households, leaving them very little room to save. This is due to rising childcare costs as well as housing and related costs.
According to the survey, there are growing gender disparities between men and women in the UK when it comes to pensions and salary. The median pay disparity between men and women in the UK has increased, with the average man earning £33,000 year compared to the average woman’s £22,800. This represents a difference of £10,200 annually.
In addition, the study reveals that women are more likely than males to report having insufficient retirement funds. The difference is most obvious among younger women in their 30s, as 12 per cent of males of the same age claim they are saving nothing at all compared to 20 per cent of women.
Additionally, growing expenses are making matters worse. In the UK, 16 per cent of women report that they have reduced their retirement savings by an average of £1,824 each year in order to deal with rising costs. This number has gone up since March 2022, when only 10 per cent of women said that they were reducing their pensions.
Scottish Widows managing director of workplace savings Jackie Leiper says: “Despite increased reporting, stubborn gender pay gaps persist for women across the UK. Our research shows that single mothers are much more likely to be exposed financially, cutting back in ways that jeopardise their wellbeing.
“Current economic conditions are making it harder than ever to fix the deep inequalities that underlie the pensions gap, with the retirement savings of women deeply impacted by key life events such as divorce or motherhood. Providers, regulators and employers must collaborate urgently to address this crisis– from reconsidering the auto-enrolment threshold to far greater investment in childcare support – to help the most vulnerable in the near term.”