Women set for £100,000 pension pay gap with men

Women set for £100,000 pension pay gap with men

The average woman in her twenties today will retire with £100,000 less in her pension than her male peers, research suggests.

Pension firm Scottish Widows said women would have to work an extra 40 years if they wanted to close the gap.

It blamed their lower average earnings, higher probability of working part-time and heavier childcare burden.

The government said its pension reforms had helped millions more women save for retirement.

According to the research, over the first 15 years of their careers, women on average save about £2,200 a year, compared to £3,300 for men.

The difference only widens over a lifetime as wage increases lead to “significant inequalities in retirement income”, it added.

Jackie Leiper, managing director of pensions at Scottish Widows, said: “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.

“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 said to reach “retirement parity”, a woman in her 20s today would have to work 37 years longer than a man of the same age to accumulate the same income.

However, it said if women increased their pensions contributions at the start of their careers by 5%, they could close the gap almost completely by the time their retired.

A Department for Work and Pensions spokesman said: “Our groundbreaking pension reforms, including automatic enrolment, have helped millions more women save into a pension, many for the first time.

“Pension participation among eligible women working in the private sector has risen from 40% in 2012, to 86% in 2019.”

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