The gender pension gap – the difference in how much men and women save for retirement – can be difficult to overcome. Women often take on caregiving responsibilities and receive lower wages.
Ahead of International Women's Day (March 8), a new survey has further revealed the gap.
It found that six in ten women (60%) had not set up any pension plan other than making sure they were registered with their employer's scheme. This is also higher than the 46% of men surveyed who responded this way.
Less than half (44%) of women with a workplace pension say they know how their workplace pension works, compared with six in 10 (60%) men, research from retirement adviser My Pension Expert found.
An Opinium survey of 2,000 people in January found women (19%) were more likely than men (15%) to say they only contribute the minimum amount required to their workplace pension.
Lily Megson, head of policy at My Pension Expert, says: “Our research casts a frightening shadow over the financial future of women in the UK, as the gender pension gap rears its ugly head once again.”
The study follows a recent report from pension provider NOW: Pensions and Pensions Policy Institute (PPI). According to the report, women typically need to work an additional 19 years to retire with the same pension savings as men.
There may be some steps women can take to at least close the gap.
Jackie Leiper, Managing Director of Scottish Widows, says: “One of the most important things women can do is to stay mindful of their personal finances, including their pensions. We know that around one in five women plan to rely at least partially on their partner’s income during retirement.”
Leiper recommends that couples “discuss” pensions, including if they decide to call it a day and get divorced. Pensions can be overlooked when couples separate.
If you're a couple, you may want to consider the financial impact career breaks and caregiving responsibilities will have on both retirement plans and discuss ways to share them more equally.
And if you've left your job, it's a good idea to check if you're eligible for National Insurance credits, which could be included in your state pension.
The earnings “factor” that allows people to be automatically enrolled into a workplace pension by their employer is £10,000. However, you can still request to join if your income is low.
If you worked for multiple employers, you may be entitled to different pensions. The Pension Trace Service can help you track this.
The cost of childcare may make pension saving more difficult. Make sure you're getting the support you deserve from Childcare Choices.
Leiper also suggests paying into your pension from a young age. This can help offset loss of income if you take a career break later in life or work part-time.
She explains: “By managing their contributions and increasing them as quickly as possible, young women have the opportunity to improve their long-term savings prospects.”