Pension warning as women set to be £180,000 worse off than men – ‘wake up call!’ | Personal Finance | Finance
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Pension saving is often considered to be a long-term endeavour, meaning people take action years before their actual retirement. This may come in the form of workplace savings arrangements, or personal endeavours to put money aside for retirement. Regardless, there are a number of factors which impact pension saving, and this is particularly true for women.
Issues such as the gender pay gap, time taken off for childcare, and other caring responsibilities have meant a general trend of a gender pension gap – where women are left with less in their pension pot than men.
However, new research has appeared to show this problem may only be getting worse.
Analysis released today by Cebr and equity release lender, more2life, has shown the ways in which women are currently missing out.
Men are anticipating an annual retirement of £20,712, according to the research, with women suggesting their income will be £14,964 in late life.
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Dave Harris, Chief Executive Officer at more2life, said: “Although women appear to be better at saving into their pension, they still face a retirement that is less comfortable and financially secure than their male counterparts.
“The stark difference in retirement incomes highlights the need to address the root causes of financial gender equality.
“We must better support women as they make choices around how to use their assets both in the lead up to and during retirement.”
The gender pension gap, while unfortunately an enduring issue, appears to have been exacerbated by the ongoing pandemic.
Research undertaken by the firms last year suggested a pension gap of £157,263 compared to this year’s £183,936 – showing a sharp increase.
Some 30 percent of women asked said their financial situation has worsened since the start of the pandemic, curbing their ability to fund or save for later life.
This is compared to a quarter of men who relayed the same opinion.
Generally speaking, it is women who have been particularly impacted by the pandemic, figures have shown.
Data form HMRC showed a consistently greater number of women furloughed between July and December 2020.
And women are more likely to work in areas impacted by the pandemic such as hospitality and leisure services.
Mr Harris continued: “Today’s figures are another alarming wake-up call about the gender disparity in retirement.
“It’s clear the COVID-19 pandemic has caused significant disruption to many people’s retirement savings, but the impact has been most acutely felt among older women.
“As we begin to think about what a post-Covid society looks like, it’s vital the industry and Government does more to encourage women to engage with long-term financial planning.
“Raising awareness of alternative retirement income sources, such as property wealth, is crucial in ensuring current and future retirees can enjoy the retirement they deserve.”
Mr Harris pointed towards a number of potential options which could be available for women going forward.
One of these is equity release, a process which can assist older homeowners in unlocking wealth from their home to use as a retirement fund.
This, he concluded, could be useful for women who are looking for further financial stability, while managing the impact of the retirement gender gap so it is not as palpably felt.
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