Women in the UK have an average of 40 per cent less in their pension pots than men, according to a new report.
“The findings are stark but not surprising,” says Michelle Gribbin, Chief Investment Officer at Profile Pensions. The reasons for the gender pension gap are well documented and hundreds of years in the making, from traditional gender-specific roles to the ongoing discrepancy between the salaries of men and women.”
Gribbin says that although there have been huge strides in the financial status of women over the last 50 years, we are still battling an unequal legacy and it’s now a necessity for women to make their money work harder.
She said: “Our findings are a timely reminder that women need to take action, as early as possible, to make sure that they are facing retirement confident that they have enough money to live on.”
The study of nearly 9,500 people revealed that the pensions gap is starkest in Southern Scotland where women have just less than half (48 per cent) in their retirement pot than men do. Londoners fare better with the lowest difference of just over a quarter (26 per cent).
The difference between men’s and women’s pensions across regions in the UK:
|Region||Male pension pot (Average)||Female pension pot (Average)||Percentage difference|
|North Scotland||£38,548||£20,414||– 47%|
|Southern Scotland||£36,836||£19,039||– 48%|
|North East||£36,729||£21,457||– 42%|
|North West||£37,840||£22,769||– 40%|
|West Midlands||£39,219||£26,915||– 31%|
|East Midlands||£40,183||£23,504||– 42%|
|East Anglia||£44,752||£24,987||– 44%|
|Central Southern||£46,922||£25,080||– 47%|
|South West||£35,148||£20,828||– 41%|
|South East||£46,578||£26,654||– 43%|
|Greater London||£46,409||£34,347||– 26%|
|Northern Island||£31,718||£20,136||– 37%|
|Nationwide||£39,554||£ 23,792||– 40%|
The new study suggest the pensions gap is even bigger than previously thought. In July last year, a study by Fidelity International revealed that women were likely to end up with a pot that is 11 per cent smaller than for men. The Financial Power of Women report suggested that women could close the gender pension gap by paying just 1 per cent more into their pension pot each month.
Michelle Gribbin offers her top tips for how to close the pensions gap before you hit retirement age:
- Get to know your pension – Who holds it and what type of scheme do you have? How much is paid in each month and by who, and how much will each pot generate in retirement?
- Understand your circumstances – Are you married or single? Do you and your partner both have your own pension provision. No two pensions are alike and it’s crucial you understand yours.
- Face uncomfortable questions – What happens if your partner dies? Do you know enough about their pensions status and what you are entitled to?
- Review regularly – You should be asking yourself these questions regularly; ideally every year and certainly every time you change job.
- Seek help and guidance – There are resources out there, so make the most of them. The Government has worked hard over the last few years to overhaul their guidance and alternatives such as Profile Pensions are on hand to help those with even the smallest pension pots.
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