Women face gender pension gap of 11%

One of the key issues we as women face is that of retirement planning. Not only do we tend to get paid less for the same jobs as men and take time off from our careers to raise a family, but we also tend to live longer than men. That means we tend to build smaller retirement funds but need to make them last longer!

Recent research from Fidelity suggests that young women in their late 20s and early 30s will save a pension pot 11% smaller than men by the time they retire. Whilst 11% may not sound huge, it is quite considerable when we look at the ‘pounds and pence’.

The research indicates that a 25-34 year old woman’s pension pot will be worth £126,784 by the time she reaches age 68. In comparison, men can expect their pension pot to reach £142,836. Whilst Fidelity’s research will have been based on various assumptions and is not an exact science, their findings are quite frightening!

Earnings play a key part in this research. According to data from the Office for National Statistics, the average man working full-time earns £718 per week whereas the average woman earns £578. More light has been shed on this trend in the national media recently, as the top 10 earners at the BBC were all – you guessed it – men! Already we can see why women might struggle to build a retirement fund that matches those of men.

But there are other factors at play, too. One being that women generally tend to take a more cautious approach to their investments than men which will reduce the potential for long-term savings growth. Understanding the relationship between investment risk and reward, and maximising your savings potential, is a key part of my role; not just as financial planner but also as a behavioural coach. 

Another striking recent finding is that saving for retirement does not feature as a main priority for many women, according to research by LifeSight. Instead, women are more focussed on day-to-day living costs, housing costs, general savings and paying off debt. 

Whilst we all have differing circumstances and priorities, ensuring that you have a robust retirement plan is one of the most important things you can do and will help to ensure that you don’t end up living in ‘retirement poverty’. Again, one of my duties as a behavioural coach is to bring to your attention those areas which you maybe haven’t given much thought to in the past, but are vital in ensuring that you have a smooth and comfortable financial journey beyond retirement.

Thankfully, as a society we are getting closer and closer to gender equality. However, the above research shows that there is still work to do. I hope that here at CL4Women we can play a small part in empowering women; giving them confidence with their finances and helping them to enjoy a high standard of living in retirement.

If you would like to discuss your retirement planning with me then please do not hesitate to get in touch.