Nine million women risk retirement poverty


A large number of women in the UK are at serious risk of facing poverty in retirement, as a new report warns that up to 4.5 million working women do not save enough for retirement and another 4.5 million women are not saving anything at all.

Research by the Association of British Insurers (ABI) has found that women are specifically disadvantaged compared to men when it comes to pensions, with their work and earnings patterns having a huge impact on their ability to save and their eventual retirement income.

Women earn less than men and are much more likely than men to have a broken work record because of caring responsibilities. They retire earlier and live longer. As a result they have less opportunity to build up their pension entitlements.

The ABI resport, The Gender Pensions Gap, found that more than a 35 per cent of women do not belong to a pension scheme compared to just 25 per cent of men and that women are less likely to benefit from employer pension contributions. Only 9 per cent of women receive an employer contribution of more than 5 per cent of their wages, compared to 15 per cent of men .

When they do save, over half of women contribute less than £100 per month to their pension, and a s a result, 83 per cent of retired women have a total personal income of less then £1,000 per month compared with just 58 per cent of men.

Head of Pensions and Saving at the ABI, Joanne Segars, said that the gender pensions gap is just as wide and just as important as the gender pay gap.

"The pressures on women today are immense," she said. "We are less likely to be in employment, we tend to have lower wages and we are more likely to spend our disposable income on our children. But increased pension saving is vital if women are to have a decent income in retirement.”

The report makes a number of suggestions about how pension saving, particularly amongst women, could be encouraged, including encouraging employers to contribute to employees’ pensions and providing more education and information, including making pensions advice available through the workplace.

It also attacks the government's obsession with means-tested benefits, arguing that the complicated system of means-testing - 65 per cent of Pension Credit recipients are women - makes it difficult for people to decide how much they need to save. "A decent state pension would provide a solid foundation on which to build private saving", the report states.

"Our research also shows that women want more information about what they need to do," Joanne Segars added.

"All too frequently women say they know little or nothing about pensions. This low level of awareness is a huge barrier to saving.

"Women need more employer contributions and information and help should be more freely available. The savings industry, Government and employers must work together to help women save for a decent income in retirement."