Women have a lower average pot size at every age band, according to Legal & General Investment Management.
That was the main conclusion from a presentation at the Corporate Adviser’s Master Trust and GPP Conference discussing low-earners, the young and women and how they are slipping through the auto-enrolment net with women disproportionately represented in these groups and whether steps to support vulnerable savers by closing gaps in current pension provision and improving awareness of entitlements which could help women achieve a secure retirement.
According to an LGIM study conducted this summer, the gap between men and women becomes noticeable at the age of 35 and never closes. The analysis also shows that the gender pension disparity exists in all industries, regardless of average salary across industries. It is noted that three of the six industries with the biggest gender wage disparity are the top sectors for female employment, namely pharmaceuticals, healthcare, and charitable organisations.
Legal & General head of DC sales Pete Holman highlighted that this is most probably due to women deciding to have children around that age. Further along the line, women decide to have career breaks for other reasons which may include the menopause.
Holman also highlighted that some women can rely on their partner’s pension, divorces do happen and one in twelve divorces in the last year have pension sharing order.
The research found that 50 per cent of young women without a pension say the reason why is because it wasn’t offered to them. 54 per cent of young women who are not contributing to a pension worry about not saving enough while 72 per cent of women were less likely to be able to afford to pay any contributions now due to the rising cost of living.
Holman said: “Whether it’s greater financial education in school, university or whether its government campaigns or clear information for all of us to employers to help people on this journey, it’s really clear that women need more information to enable them to make better choices.”
The research also revealed that 67 per cent of consumers claimed that keeping up with bills and credit commitments is already a great load, with 37 per cent having fallen behind or missed at least three payments on credit cards, loans, or domestic bills in the previous six months.
Meanwhile, 69 per cent of low-income workers indicated they do not contribute to their employer’s pension plan because they cannot afford it. Almost 60 per cent of low-income workers are concerned about not saving enough for retirement.
According to the study, 63 per cent of workers earning less than £10k would need to borrow money from friends and family within a week of losing their primary source of income.
Conference attendees were asked what the biggest impact they were seeing from clients in light of the cost of living crisis was and 39 per cent said that they have seen more challenges and concerns from members regarding the value of their pot.
The research found that 72 per cent of young workers didn’t realise they could ask to be enrolled into a pension if they earned less than £6,240 with 73 per cent agreeing that employees aged under 22 years should be automatically enrolled.
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