The increased cost of caring for elderly parents and raising children means a record number of women are not saving enough for retirement, a new report claims.
Nearly 25 percent of women over 40 are prioritising supporting their children financially over adequately contributing to a pension, said a recently published report by insurance giant Scottish Widows.
According to the report, 37 percent of women across the UK do not have any pension provision at all, and only 40 percent of women put aside enough money to have an “adequate” retirement, which is the lowest percentage since the statistic began being tracked by Scottish Widows in 2006.
The average UK woman contributing to a pension only puts aside £2,184 each year, compared to £3,120 for men, a difference of nearly £1,000 in contributions every year.
“Overall, the growing gender gap in retirement savings means that women are facing an ever increasing shortfall when it comes to retiring and must act now to ensure they will not be exposed in later life,” said Lynn Graves, head of business development and corporate pensions for Scottish Widows.
The Scottish Widows report came one day after the Pensions Policy Institute claimed that the record low number of Britons adequately saving for retirement may lead to the Government making retirement saving compulsory.
In addition to the increasing financial burden being placed on women, the Scottish Widows report also pointed out that a startling low number of women have no idea where to start saving for retirement and are reliant on their significant other to fund their retirement.
The report also added that 46 percent of women between the ages of 18 and 29 believe the £144 per week state pension will be enough to fund their retirement lifestyle. Furthermore, more than one-third of women over 60 have no idea what an annuity is.
Although 37 percent of women in the UK have no pension to speak of, the number increases to 54 percent for women between 22 and 29 years of age. Not surprising, the number is lower for women in older age brackets.
According to Sarah Pennels, the founder of the women’s financial advice website SavvyWoman, “The continued squeeze on the cost of living has made it much harder for many women to consider saving for their retirement and, in previous years, the gender pay gap has played a significant part in explaining why this is.”