The number of women saving adequately for retirement has shifted from a record low to a four-year high in the last 12 months, according to Scottish Widows’ annual Women and Retirement Report.
Half (50%) of the UK female population is now preparing adequately – the first increase recorded since 2011. This is a leap of 10 percentage points from 40 to 50 in the past year following the significant changes in pensions regulations such as the introduction of automatic enrolment.
Savings ratio
Scottish Widows’ latest report also found that the gender gap is closing, with a nine percentage point gap between women and men in 2013 now reduced to five. Women aged 50-64 are keeping up with men in the same age group, with 60% and 62% respectively preparing adequately.
In the 50-64 age group, average savings for women are 10.5% of earnings, compared to 11.2% for men – approaching 12%, the savings ratio recommended by Scottish Widows as the minimum necessary for a comfortable retirement.
Widespread approval
The report suggests automatic enrolment has been met with widespread approval (62%) among working women of all ages. On average, women who are auto-enrolled are saving an average of £42.51 a month into their workplace pensions, compared to £49.27 for men.
Despite the marked improvement overall, there is still a gap between how much women and men are putting away for retirement each month. Women typically save £206 a month for retirement, which is approximately 30% less than men who are saving an average of £298 each month. This creates an overall gender gap of £142,000 in terms of the total amount saved for retirement over a working lifetime from age 22 to age 68. More than one in ten women (11%) still say they have never thought seriously about paying into a pension and around three in ten say they never will.
Awareness gap
The report also found that although overall savings levels are increasing amongst women, there still exists a significant awareness gap, with only 15% of women saying that they fully understand pensions.
INFORMATION IS BASED ON OUR CURRENT UNDERSTANDING OF TAXATION LEGISLATION
AND REGULATIONS. ANY LEVELS AND BASES OF, AND RELIEFS FROM, TAXATION ARE SUBJECT TO CHANGE.
A PENSION IS A LONG-TERM INVESTMENT. THE FUND VALUE MAY FLUCTUATE AND CAN GO DOWN. YOUR EVENTUAL INCOME MAY DEPEND UPON THE SIZE OF THE FUND AT RETIREMENT, FUTURE INTEREST RATES AND TAX LEGISLATION.
Source data:
The Scottish Widows Women and Retirement Report is based on research carried out online by YouGov of 5,055 UK adults over the age of 18 in March 2014. It is one of the largest surveys undertaken into women’s attitudes on pensions, and it monitors pensions savings behaviour annually using the Scottish Widows Pensions Index and the Scottish Widows Average Savings Ratio.
