According to recent reports from the Pensions Policy Institute and Close Brothers the gender and income divide remains alive and well in the world of pensions.
Women have often found their career and service progression interrupted by family commitments, the gender pay gap and career breaks and the overtaking of Final Salary Schemes by Defined Contribution schemes was seen as a positive move towards addressing this discrepancy. However, despite the fact that DC schemes can provide generous tax relief the recent research by PPI shows that this is disproportionally benefiting men.
These findings make worrying reading alongside previous figures from the PPI showing that there are 1.2million women in their 50s who have no private pension. 50% higher than the number of men.
In addition to the PPI findings a survey of 2000 people by Close Brothers indicated that, whilst average pension savings pots have risen an average of 8% for UK men since 2017, women’s have fallen 15%; and a 2019 survey by Censuswide found that 62% of female respondents were concerned about running out of money in retirement compared to 53% of men.
What can women do to maximise their pension savings?
“Women really need to be encouraged to start prioritising their pensions earlier in their careers” is the advice from Corinthian Benefits, “this will allow them to achieve maximum benefit from employer contributions, tax benefits and investments”.
“Women should also try to maintain pension contributions during maternity leave so as to keep NI credits towards their state pension.”
But what about those women who are already well down the career path?
“Increasing their regular contribution, even by a little, can make a difference to the final sum available” Corinthian suggest, “women tend to be less confident in their knowledge of pensions (just 5% described their understanding as ‘very good’ versus 18% of men)* and seeking appropriate advice at any stage is also a sensible option.”
If you would like to discuss your pension contributions, please get in touch. The Corinthian team are here to help. email@example.com
* Research conducted by Censuswide for AJ Bell between 08.02.2019 - 14.02.2019, with 554 respondents (aged 55+) that have entered pension income drawdown since April 2015. Censuswide abide by and employ members of the Market Research Society which is based on the ESOMAR principles.
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