Personnel Today
  • Home
    • All PT content
    • Advertise
  • Email sign-up
  • Topics
    • HR Practice
    • Employee relations
    • Learning & training
    • Pay & benefits
    • Wellbeing
    • Recruitment & retention
    • HR strategy
    • HR Tech
    • The HR profession
    • Global
    • All HR topics
  • Legal
    • Case law
    • Commentary
    • Flexible working
    • Legal timetable
    • Maternity & paternity
    • Shared parental leave
    • Redundancy
    • TUPE
    • Disciplinary and grievances
    • Employer’s guides
  • AWARDS
    • Personnel Today Awards
    • The RAD Awards
  • Jobs
    • Find a job
    • Jobs by email
    • Careers advice
    • Post a job
  • XpertHR
    • Learn more
    • Products
    • Pricing
    • Free trial
    • Subscribe
    • XpertHR USA
  • Webinars
  • OHW+

Personnel Today

Register
Log in
Personnel Today
  • Home
    • All PT content
    • Advertise
  • Email sign-up
  • Topics
    • HR Practice
    • Employee relations
    • Learning & training
    • Pay & benefits
    • Wellbeing
    • Recruitment & retention
    • HR strategy
    • HR Tech
    • The HR profession
    • Global
    • All HR topics
  • Legal
    • Case law
    • Commentary
    • Flexible working
    • Legal timetable
    • Maternity & paternity
    • Shared parental leave
    • Redundancy
    • TUPE
    • Disciplinary and grievances
    • Employer’s guides
  • AWARDS
    • Personnel Today Awards
    • The RAD Awards
  • Jobs
    • Find a job
    • Jobs by email
    • Careers advice
    • Post a job
  • XpertHR
    • Learn more
    • Products
    • Pricing
    • Free trial
    • Subscribe
    • XpertHR USA
  • Webinars
  • OHW+

Auto-enrolmentEquality, diversity and inclusionLatest NewsGenderRetirement

Younger women face £100,000 gender pensions gap

by Jo Faragher 8 Mar 2021
by Jo Faragher 8 Mar 2021 Women will spend more of their career working part time and caring for family, so saving less
Shutterstock
Women will spend more of their career working part time and caring for family, so saving less
Shutterstock

The average woman in her twenties will have to work almost 40 years longer than her male counterpart to build up the same pension, according to a report by Scottish Widows.

According to the company’s report, published to coincide with International Women’s Day, a female saver can expect to have £100,000 less in her retirement savings thanks to time taken out of the workplace to raise children or care for family members.

She will typically save £2,200 annually during the first 15 years of her career, compared to £3,300 for a man the same age, according to Scottish Widows. This means she would have to work 37 years longer to reach the same level of retirement funds.

Pensions

Pension Schemes Act hailed as ‘landmark’ 

Consultation on simplifying annual benefit statements for workplace pensions 

Women in their twenties not only tend to earn less than men (median salary at 25 is £26,100 for a man and £23,700 for a woman) but they also are less engaged about saving for their retirement, the report claimed.

Fifty-six per cent of men in their twenties save the recommended minimum of 12% of income, compared to 46% of women. Once taking time off to have children and some part-time working is factored in, this creates a major “gender pensions gap” by the age of 68, it said.

To reach the calculation, Scottish Widows assumes that a woman and man start working and saving 25, at the median salary for their age and retire at 68. The man takes no career breaks, while the woman takes a total of 2.5 years of career breaks in her late twenties and early thirties, typically for maternity leave.

Both do some part-time work during their career, but the woman spends seven more years in part-time work than the man – 42% of women work part-time, compared to 13% of men. It then assumes both save a varying amount of their income throughout their career, which grows by 2% each year in real terms.

Jackie Leiper, managing director of workplace savings and distribution at Scottish Widows said the coronavirus crisis would only make this situation worse.

“Women were already facing systemic challenges when saving for retirement. We know that young women have been some of the hardest hit by the short-term financial impact of the pandemic and this has only exacerbated the challenge of reaching pensions parity,” she said.

“At the same time, caring responsibilities and high childcare costs are keeping women out of the workforce, lowering their contributions and denting their pension pots.”

Scottish Widows argues that if women had better knowledge about the importance of pension savings in their twenties, this gap could be closed.

The company’s 2020 Women and Retirement report called for the government to raise the default contribution to pensions so employees could save more, and for employers to continue to contribute a portion of salary at points when staff choose to opt out.

It also called for pensions auto-enrolment to be extended to the self-employed, and for the minimum age for auto-enrolment to be lowered to 18 (from 22), so employees have a longer period in which to save for their retirement.

The report found that while the highest proportion of women are saving for retirement since it began its analysis, young women are still the most likely to fall behind men in terms of saving adequately for retirement.

Personnel Today Awards newsletter

Be the first to read updates relating to the annual Personnel Today Awards, celebrating excellence in HR and L&D among employers and suppliers.

OptOut
This field is for validation purposes and should be left unchanged.

Compensation and benefits opportunities on Personnel Today

Browse more compensation and benefits jobs

Jo Faragher
Jo Faragher

Jo Faragher has been an employment and business journalist for 20 years. She regularly contributes to Personnel Today and writes features for a number of national business and membership magazines. Jo is also the author of 'Good Work, Great Technology', published in 2022 by Clink Street Publishing, charting the relationship between effective workplace technology and productive and happy employees. She won the Willis Towers Watson HR journalist of the year award in 2015 and has been highly commended twice.

previous post
A third of women hide menopause symptoms at work
next post
Study into how pandemic has affected health and wellbeing of OH practitioners

1 comment

Avatar
David 10 Mar 2021 - 2:34 pm

“Scottish Widows argues that if women had better knowledge about the importance of pension savings in their twenties, this gap could be closed.”

Apparently men are born with this knowledge.

Or does societal expectations of men being ‘the provider’ still dominate?

Reply

Leave a Comment Cancel Reply

Save my name, email, and website in this browser for the next time I comment.

You may also like

Single mothers and divorced women face heightened gender...

15 Nov 2023

Morrisons to change pension contributions for hourly-paid staff

15 Nov 2023

Universities face ‘eye-watering’ increase in pension contributions

13 Nov 2023

Thousands opting out of NHS pensions

16 Oct 2023

Introduce three-day week for over 50s, says former...

26 Sep 2023

Auto-enrolment into savings boosts financial wellbeing

18 Sep 2023

Pension contributions should double, says Abrdn chief

4 Sep 2023

Police Federation will not appeal discrimination ruling

19 Jul 2023

DC pension reforms announced by government

11 Jul 2023

Gender pensions gap is more a ‘gaping chasm’

6 Jun 2023

  • How to spot and tackle imposter syndrome in the workplace PROMOTED | Half of all UK adults...Read more
  • BetterMe for Business: How to Build Wellness Culture at Work PROMOTED | Ever encountered a...Read more
  • Global growth with simple HR compliance (webinar) WEBINAR | In an increasingly global marketplace...Read more
  • Talent acquisition: How AI can complement a ‘back to basics’ approach PROMOTED | Artificial intelligence is now...Read more
  • What will it mean to be an HR professional in 2024? (webinar) WEBINAR | As we approach 2024...Read more
  • HR Budget Planning for 2024: Preparing your People Strategy PROMOTED | As organisations continue to adapt...Read more

Personnel Today Jobs
 

Search Jobs

PERSONNEL TODAY

About us
Contact us
Browse all HR topics
Email newsletters
Content feeds
Cookies policy
Privacy policy
Terms and conditions

JOBS

Personnel Today Jobs
Post a job
Why advertise with us?

EVENTS & PRODUCTS

The Personnel Today Awards
The RAD Awards
Employee Benefits
Forum for Expatriate Management
OHW+
Whatmedia

ADVERTISING & PR

Advertising opportunities
Features list 2023

  • Facebook
  • Twitter
  • Instagram
  • Linkedin


© 2011 - 2023 DVV Media International Ltd

Personnel Today
  • Home
    • All PT content
    • Advertise
  • Email sign-up
  • Topics
    • HR Practice
    • Employee relations
    • Learning & training
    • Pay & benefits
    • Wellbeing
    • Recruitment & retention
    • HR strategy
    • HR Tech
    • The HR profession
    • Global
    • All HR topics
  • Legal
    • Case law
    • Commentary
    • Flexible working
    • Legal timetable
    • Maternity & paternity
    • Shared parental leave
    • Redundancy
    • TUPE
    • Disciplinary and grievances
    • Employer’s guides
  • AWARDS
    • Personnel Today Awards
    • The RAD Awards
  • Jobs
    • Find a job
    • Jobs by email
    • Careers advice
    • Post a job
  • XpertHR
    • Learn more
    • Products
    • Pricing
    • Free trial
    • Subscribe
    • XpertHR USA
  • Webinars
  • OHW+