The gender pension gap has closed to just 1% but the Coronavirus pandemic threatens to make the savings gap worse with women needing to work beyond 100 to match men’s pension pot.
However, the pay gap and part-time working ratio means women saving adequately on the median wage are still saving £1,300 a year less than men, according to Scottish Widows’ Women and Retirement Report.
This means for a woman to save the same amount into her pension as a man, she would need to work an extra 37 years – which would take her over the age of 100 if retiring at State Pension age.
The gender pension gap is at the narrowest on record as more women are putting enough money aside. Almost three in five (59%) of women are now saving adequately in comparison to 60% of men.
However, young women are struggling to save according to Scottish Widows’ research. Just 46% of those in their 20s surveyed were saving the recommended minimum 12% of salary. This compares to 54% of men the same age, and to almost two-thirds (64%) of women in their 50s.
Jackie Leiper, managing director of workplace savings at Scottish Widows, said: “While we’re heartened at the record levels of saving, there’s still a mountain to climb before we reach true gender pension parity. Women face decades of extra working before they’ll have a pension to match that of a man’s, which is unfair and unacceptable. Until we can resolve structural inequalities, from the gender pay gap to the uneven division of labour at home, we will never have pension equality.
“In a matter of months the pandemic is reversing years of progress. We’re calling for urgent pension reforms that will help more women save more for retirement, including improved childcare provisions, enhanced pensions for those on maternity leave, the inclusion of pensions in divorce proceedings, and the scrapping of the auto-enrolment minimum earnings threshold.”