An increase of 1 per cent in workplace pension contributions for women could result in nearly £40,000 extra in retirement savings, according to Fidelity.
According to Fidelity, this change has the potential to significantly reduce the financial impact of career breaks and, in the long run, to close the gender pension gap.
Fidelity says pushing for these changes is important for improving financial security and gender equality in retirement planning.
The gender pensions gap is a serious issue that highlights the need to encourage and support women to start saving for retirement early in their employment. Fidelity says that the disparity is caused by a number of variables, such as career pauses, childcare costs, caregiving obligations, and lower salaries. These factors frequently cause women to have lower retirement savings than men.
Fidelity International associate director Emma-Lou Montgomery says: “Closing the gender pension gap remains one of the biggest financial challenges we face. Lower income levels combined with career breaks or periods of part-time work to care for children or loved ones, means that we are very rarely on a level playing field with men when saving for retirement. And with women typically living longer in retirement than men, the reality is that many women face working longer, or simply having to retire with far less.
“The attention on this issue must now lead to action. At a policy and industry level we need to look at how pensions support the lives women lead. We need to address engagement levels, increase awareness of this very important issue and perhaps most importantly empower women and equip them with the tools to take steps themselves to bridge the pensions gender gap.”