Women's pension saving reaches an "all-time low"

Retirement savings

The number of women saving adequately for retirement is at an all-time low, lagging well behind men, Scottish Widows has found.

In its annual Women and Pensions Report, the firm found that just 40% of women are preparing adequately for their retirement - a drop from 42% last year and 50% in 2011. This compares to 49% of men who are preparing adequately for later life.

The survey of over 5,000 people found that this year the pensions saving gender gap has now reached £1,000 a year, with women saving an average of £182 a month compared to £260 for men. Just over a third (37%) of women have no pension at all, compared to just over a quarter (27%) of men.

Lynn Graves, head of business development at Scottish Widows' corporate pensions department, said : "It is worrying to see that women are continuing to lag behind men in retirement savings. This growing gender gap in retirement savings means that women are facing an ever increasing shortfall when it comes to retiring and must act now to ensure they will not be left exposed in later life."

The firm said it had uncovered a number of lifestyle reasons for why women fail to keep pace with men throughout their lives.

Women in their 20s are tied down by short-term financial pressures and instead of saving for retirement prioritise living expenses, paying off debt, travel, and saving for a property.

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Only 50% of women in their 30s work full-time compared with 81% of men of the same age, reducing their ability to contribute to a pension.

Women in their 40s prioritise supporting their children over retirement saving, while paying off debt is the key focus of those in their 50s. Scottish Widows found that women in their 50s still owe an average amount of £11,400, slightly higher than the £11,000 of average debt women in their 40s have.

Graves added: "Of particular concern is the number of women in their 40s who are planning to rely on their partner to help support them in retirement, but are unsure of what their pension provision would be were they to separate. We should encourage these individuals to take full responsibility for their financial independence."

What can be done?

Tom McPhail, Head of Pensions Research, Hargreaves Lansdown, said there is more to be done to help women enjoy a comparable standard of retirement provision to men. He explained: "The government can raise the Universal Pension Allowance, which has been stuck at £3,600 since 2001 and is falling woefully behind against rising prices. This is an important allowance widely used by non-earning spouses, those taking career breaks and children. Had this increased by RPI inflation it would now be over £5,289.

"Employers should be encouraged to talk to their employees about the benefits of auto-enrolment, to encourage as many lower earners as possible to opt-in to their workplace scheme and take advantage of their employer's contributions."