‘Motherhood penalty’ hits women’s pension savings

The ‘Motherhood penalty’ continues to hit women’s pension savings, according to The People’s Pension, with one in five women (20 per cent) stopping or decreasing their pension savings.

Research conducted by YouGov, found that women’s earnings are twice as likely to be affected after having children then men’s, with over four in ten (43 per cent) women reducing their working hours since having a child and a further 31 per cent of women stopping their work completely for a period of time.

While 21 per cent of those surveyed admitted they intended to rely on their partners pension in retirement, the survey also showed that only 4 per cent of women were actively increasing their pension contributions.

Commenting on the research, The People’s Pension director of policy, Gregg McClymont, said: “Voluntary additional pensions provision is unrealistic for most women at a time when household finances are especially stretched.

"But without those pension contributions many women’s pension pots fall behind men’s and never recover the lost ground.

“That’s why we’re calling on the next government to accept that raising a family is an economic activity that deserves workplace pension contributions and to address the cripplingly high costs of childcare in the UK.”

The survey also found that the majority of workers are ill-prepared for retirement, with nearly two thirds of people (64 per cent) admitting that they don’t think they’re saving enough despite 61 per cent of people intending to rely on private or workplace pensions.

McClymont added: “While automatic enrolment has got off to a great start it’s clear that millions of people still aren’t saving what they need to.

"We’re calling on the next government to build on the success by helping workers to save more and ensure that millions of people aren’t unnecessarily excluded from auto-enrolment.”

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