Worrying findings released on International Women’s Day, reveal that more than half of female employees admit to feeling financially unprepared for retirement, as fresh evidence emerges of a gender savings gap.
Financial firm Close Brothers and trade body the Pensions and Lifetime Savings Association (PLSA) found that 51% of female workers feel financially unprepared for retirement, while only two in 10 (23%) female employees feel well prepared for retirement.
In comparison, just over a third (35%) of male workers feel financially unprepared for retirement, with more than a third (36%) feeling well prepared.
When it comes to pension saving, The Lifetime Savings Challenge Report 2017 found a significant savings gap when comparing male and female pension pots. The average amount in a woman’s workplace pension scheme was less than half that of their male colleagues at £53,000 vs £120,000.
Women are also twice as likely to have less than £5,000 in workplace savings compared to their male counterparts (29% vs 15%).
Looking at non-workplace savings, the research shows that while around a third of male employees have less than £5,000 in savings, this rises to two in five (41%) among women. The findings also reveal that female employees are saving nearly a quarter less than men in non-pension savings each month (£221 vs £305 per month), a difference of over £1,000 a year.
This savings gap is perpetuated by a significant pay divide, with the mean annual salary of women surveyed being £27,379 compared to £37,655 for men, which works out at nearly 30% less.
However, the report found that income is not the only relevant factor in savings activity. Financial confidence plays a significant role, with only a third (36%) of women feeling confident about choosing the right financial product compared to 45% of men.
Jeanette Makings, head of financial education at Close Brothers, comments: “The savings crisis is thrown into stark relief when looked at under the lens of gender imbalance. Women are not only earning less and therefore saving less, but are significantly less confident about the savings options available and how to choose what’s best for them.”