Women retire with less money on average than men (Image: Getty)
Women in the UK are retiring with significantly less money than men, new data shows. According to the statistics, women are retiring with around £127,000 less in pension savings on average than men, with industry experts claiming the system is partly to blame.
Men retire with an average of £232,000 while women reach retirement age, 67, with £105,000 – a gap of £127,000 and 55% difference. Experts from Marsh and now:pensions say auto-enrolment, which was set up by Government in 22 million, has contributed to the gap. The scheme has brought over 22 million people into workplace pensions since being introduced but many women are reportedly being left behind.
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The auto-enrolment initiative requires employers to automatically put eligible staff into a workplace pension scheme. To be eligible, you must be aged between 22 and State Pension age, earn more than £10,000 and work in the UK.
However, the £10,000 earnings threshold means those in lower-paid or part-time roles don’t qualify. Data shows that 79% of part-time female workers fall below the mark which means they miss out on a workplace pension.
Meanwhile, just 9% of part-time male workers earn below the £10,000 threshold. Women are estimated to have missed out on £7.7 billion in pension savings since the scheme was introduced 14 years ago.
As well as the impact of the scheme, women are more likely to be paid less over their working life due to the gender pay gap. The current gender pension gap is around 50% for those aged between 70 and 74, while men and women aged over 75 have a pension gap of 74%.
Experts from now:pension are now urging the Government to remove the £10,000 threshold for the pension auto-enrolment. This will help bring around 726,000 more women into the scheme.
Women have missed out on £7.7 billion in pension savings since auto-enrolment was introduced (Image: Getty)
Patrick Luthi, Mercer UK’s head of DC Product and now:pensions CEO, said: “We acknowledge there has been some progress in addressing the gender pension gap. However, women in the UK still face significant barriers to build adequate pension savings, which can lead to poor retirement outcomes.
“We continue to advocate for the removal of the auto-enrolment earnings trigger and the lower earnings limit. These changes would go some way to addressing this historic imbalance by helping women to build a financially secure future.”
Joanne Segars OBE, Chair of the Trustee Board of the now:pensions Master Trust, added: “We are committed to pushing for changes to make the UK’s pensions system more inclusive and equitable.
“We’re proud to continue raising awareness of the savings gap, which is hiding in plain sight. We have long called for urgent policy action to help reduce the huge gender pensions gap we see today. Without further changes, millions will continue to struggle to achieve a secure retirement.”