Why Is There A Pensions Gap?
The main cause of the pension gap, unsurprisingly, is the pay gap. Women, on average, still earn less than men. Most people pay a fixed percentage of their earnings into a workplace pension, so this means less money is being invested for women’s retirement.
The fact that women are more likely to work part-time, or to take time out to look after young children or elderly parents, exacerbates the problem. Other life events, like divorce, can also impact negatively on women’s savings.
At the same time, women typically live longer than men, so if they are to enjoy the same standard of living in retirement, they ideally need larger pension pots – not smaller ones.
How To Boost Your Pension Savings
Some strategies can help bolster women’s savings options:
Maximise your savings
Join a workplace pension – your contributions are boosted by tax relief and contributions from your employer, which may increase if you pay in more. If you are self-employed, you don’t benefit from an employer’s contribution, but you can still benefit from tax relief on the money saved into a personal pension arrangement.
"women typically live longer than men... to enjoy the same standard of living in retirement, they need larger pension pots – not smaller ones"
Get a pension forecast
Find out what you are likely to get from your State or workplace pension and when you can take them. If this isn’t enough to live on, you should aim to save more each month. The earlier you start, the better.
Don’t overlook your partner’s pension: Some pensions will pay out to a surviving spouse or partner. If you are not married (or not in a civil partnership) you may need to sign a form to qualify. If your partner has more substantial pensions savings, make sure you aren’t losing out on this potentially valuable benefit. Aim to build pension savings in your own name, though, because if you rely on your partner, then you could lose out if the relationship breaks down.
