Women's retirement pots half the size of men's

Published by Rachel Lacey on 01 March 2016.
Last updated on 01 March 2016

Women have around half the pension savings of men, according to a new report from the TUC.

According to the study, which was conducted by the Pensions Policy Institute on behalf of the TUC, the average woman in a defined contribution scheme has just £7,500 saved for retirement compared to £14,500 for men.

For those in defined benefit (or final salary) schemes, the typical woman has £32,000 in contrast to men who have £62,900.

See How to review and manage your pension.

Women were also more likely to get a smaller state pension, receiving 25% less a year (£2,548) than men.

Ethnic minorities, carers and the self-employed were also found to have below- average pension provisions.

In its report, “The Under-pensioned 2016”, the TUC warns that there are still huge differences in workers’ pension savings despite the introduction of compulsory saving through auto-enrolment.  This, it suggests, is because there are still many workers who do not earn enough to be eligible for auto-enrolment.

See our Guide to workplace pensions for more information on auto-enrolment.

Amongst the TUC’s proposals for improving the situation are reducing the £10,000 a year earning trigger for auto-enrolment, increasing contributions rates and removing the banding that limits the proportion of income upon which contributions are based.

‘Stark pension divide’

Frances O’Grady, general secretary of the TUC says: “Today’s report is a sobering reminder of Britain’s stark pension divide. Everyone should have the chance of a decent retirement income, not just men in full-time employment.

Women, carers and ethnic minority workers will continue to have a tough time in old age if swift action is not taken.”

“We urgently need a debate on how unions, government and employers can work together to can build on the success of auto-enrolment.”

 

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