The average pension pot for a woman in the UK is five times less than a man’s, new research from the Chartered Insurance Institute (CII) has found.
In its report published today, 24 October, CII said that the average pension pot for a 65-year-old woman is £35,800, one-fifth of a man’s, while the average cost for care for woman aged 65-74 is £70,000, compared to £37,000 for men.
According to the report, Solving Women’s pension deficit to improve retirement outcomes for all, the deficit is a result of “British social attitude and cultural norms regarding women’s status in our society”.
Women’s Risks in Life lead and report lead author, Jane Portas, said: “This report is a call to action for each and every one of us. Woman or man, son or daughter, friend or colleague, policymaker, pension provider, financial planner or employer. We all have a role to play in improving women’s pension deficit.
“Today a young woman in the UK can expect to highly achieve educationally, work through raising children until she is 70, save hard for her pension, and yet risks facing financial insecurity in later life.”
The division starts early in life, as 52 per cent of woman in their late 20s say they do not understand enough to make decisions about retirement savings, compared to 38 per cent of men.
Furthermore, 75 per cent of employees that fall below the auto-enrolment threshold are women.
Commenting on the report’s findings, Royal London director of policy, Steve Webb, said: “As this report shows, one of the most powerful factors in the relative disadvantage that women face in pensions is women’s much lower lifetime earnings, as well as the impact of relationship breakdown.
“This report is a reminder that solving the problems of women’s pensions is not just a problem for the pensions industry but for all of us.”
The report added that the incoming Single Financial Guidance Body will provide a “fresh opportunity” to improve financial engagement with woman across the UK, but that more needs to be done.
Moneyhub CEO, Samantha Seaton, added: “Pension providers and employers have a crucial role to play in raising awareness and improving engagement, and the advances in technology has made this more straightforward than ever before. By seizing the opportunities unlocked by Open Banking, providers can use data to give people a truly holistic overview of their finances.
“Seeing the power of a pension alongside other savings and investments can help people to truly understand their value, and therefore encourage and improve engagement.”