Women’s retirement prospects and savings have been dragged down by the pandemic much more than men’s, widening the gap between their pensions pots by almost £200,000.
On average, the difference between the average pensions of women and men aged over 55 widened to £184,000 in in the last year – up £26,000 on 2020, according to new research by the Centre for Economics and Business Research and equity release provider More2life.
This is despite the fact that women on average contribute a larger percentage of their income to their pension pot – putting aside 9.4 per cent as opposed to men’s 8.3 per cent contribution.
Based on these figures, women would need to work an additional 14.5 years for their pension savings to catch up with their male counterparts, the researchers said.
Women had lower retirement incomes across all career durations, but the widest discrepancy between genders was for those who had worked for more than 50 years. Amongst this group, men received “significantly more” annual retirement income at an average of £19,404 compared with women’s £11,592.
More2life attributed the “sharp increase” in the gender pensions gap to the disproportionate financial effects of the pandemic on women at work, and over 55s ability to save towards their pensions.
“These figures are concerning and back up our own research showing women are struggling to recover financially in the current environment as a result of redundancy and furlough”, More2life said.
It comes against a backdrop of other research that shows women are much more likely to have been affected by furlough or redundancy during the pandemic, as well as carrying the burden of increased childcare responsibilities when schools closed.
Between September and November 2020, for example, 178,000 women were made redundant in the UK – 76 per cent more than during the peak of the 2008 financial crisis when 100,000 women were made redundant, according to analysis by the Trades Union Congress.
In the same period, 217,000 men were made redundant – 3 per cent more than the peak during the 2008 financial crisis.
And women are more likely to work in sectors such as retail and hospitality, and thus be on furlough, according to the government’s Coronavirus Job Retention Scheme (CJRS) data.
Hargreaves Lansdown research also found that 62 per cent of women worried about being able to afford to pour enough into their pension, compared with 57 per cent of men.
“Women are struggling to recover financially in the current environment as a result of redundancy and furlough,” said Helen Morrissey, senior pensions and retirement analyst at Hargreaves Lansdown.
“However, there are things that women can do to plug the gap. It’s not too late to make a difference to your pension value by continuing to contribute after the age of 55.
“You should also check with your employer to see if they will match any further contributions as this can give your retirement planning a real boost.
“State pension and benefits also form an important part of your retirement income and so you should check what you are entitled to and whether there are any gaps that need to be filled.”