‘Large’ firm workers' pension pots increase but gender savings gap widens

The average pension pot of UK workers at ‘large’ companies has increased over the last three years, from £89,000 in 2017 to £120,000 in 2020, data from Close Brothers has revealed.

However, its research found that the gap been the average male and female pot widened over this period, from £73,000 to £89,000.

Its survey of 2,000 employees in firms with over 200 workers found that the average male pension pot size had increased by 35 per cent, from £120,000 to £162,000.

Meanwhile, the average female pension pot rose by 38 per cent, from £53,000 to £73,000.

Although the percentage increase was higher for female workers, the gap between men’s and women’s savings widened further.

Commenting on the findings, Close Brothers head of financial education, Jeanette Makings said: “While it’s really good news to see the improving pensions landscape, no doubt spurred on by the effects of auto-enrolment and financial education, there is still a significant amount of work to be done to educate employees to balance their savings plans to ensure they can support their lifestyle now, for the future and for retirement.

“With the stark gender imbalance this is even more urgent for women.”

Close Brothers’ Changing Trends of Financial Wellbeing report found that 7 per cent of employees had no pension savings, a 13 per cent fall since 2017.

The gender gap remained amongst those who had no pension savings, with 11 per cent of women saying they had no pension compared to 4 per cent of men.

The report also revealed that 24 per cent of UK employees at large firms did not know the total value of their pension savings.

The figure rose for older workers, with 30 per cent of those aged over 65 and 35 per cent of those aged between 55 and 64 not knowing the value of their pots.

Almost a fifth (16 per cent) of survey respondents said that were going to reduce the amount they contributed to their pensions due to short-term financial needs resulting from the Covid-19 crisis.

“Understanding the financial health of employees and identifying the key employee groups and financial issues that need most attention is the first step in delivering a tailored financial wellbeing programme that will drive change, and this has never been as important as in the wake of this current crisis,” added Makings.

“However, from this research, it’s clear that an urgent and common objective for all workplaces must be to better support women to improve their financial health.”

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