Millions of women missing out on pension income

Nearly two million women could be losing out on potential pension income because of confusion over eligibility, according to research from HSBC.

Although the research shows a marked increase in the number of women taking control of their pensions over the past three years, the level of understanding of retirement planning has not improved at all.

Just over half of women surveyed aged between 18 and 60 now contribute to a pension – but of those not currently planning for retirement, nearly a third believed they were too young to do so while 22% didn’t think they could afford to prioritise pension provision.

The survey also reveals that while the number of women relying on a state pension has fallen to just 2%, a worrying 38% of women believe they are ineligible to contribute to a pension because they are currently working part-time or not at all.

Just under half of women questioned were also unaware that a husband or wife can pay into their partner’s pension even if they are not working, while 70% did not know anyone can pay into a pension scheme for someone else.

Ian Martin, head of UK retirement businesses at HSBC, says: “Many women are potentially missing out as they are still confused about when they can pay into pensions and who can pay into pensions.

“If women take time out from employment - either for child care, a sabbatical, or choosing to work part-time - they often stop paying into their pension scheme, or believe they can’t start paying into a pension. This means they are unnecessarily restricting the amount they will be putting into their pension pots.”