Women have barely half the pensions of men, says TUC
UK women have barely half the pension savings of men, according to latest research carried out by the Pensions Policy Institute.
The study, sponsored by the Trades Union Congress (TUC), estimates that women have, on average, £7,500 in savings in defined contribution schemes, compared to £14,500 for men, while women typically have £32,000 in pension savings in defined benefit schemes, whereas men have £62,900.
The report also claims that the average state pension for men is £10,088, compared to only £7,540 for women, a figure around 25% lower than the male equivalent.
The TUC claims that despite recent changes to state and workplace pensions, ‘stark divisions’ between men and women will remain unless the government takes further action.
If you are concerned about your pension savings, speaking to a financial adviser can help you get a better understanding of your situation.
We spoke to London-based IFA Shannon Currie to discuss the research’s findings, and to get a clearer idea of whether the gender gap is likely to close in the near future.
“While the TUC figures look worrying, the truth is that the trend is changing in favour of women. It is worth remembering that apart from traditional workplace pensions, income in retirement is often about the availability of other non-traditional pension assets; property, for example, where the gap between men and women is much closer.
“According to a report by the Bank of Montreal’s Wealth Institute, just over half (52%) of the personal wealth in the USA is controlled by women. The UK is approaching this, but we are not there just yet.
“However, women’s share of UK wealth is rising, and there are a number of reasons why this is the case. Firstly, it is a reflection of the longer life expectancy of women. Simply put, many women end up inheriting their partner’s wealth as well as building up their own. This can mean they are ‘asset’ rich (have property) but ‘cash’ poor (lower pensions).
“There is also an increased participation in the workplace at a more senior level, especially in roles that provide generous pension arrangements, such as senior civil servants, doctors and teachers. The focus on financial equality in divorce is a real factor, too. This means that, in practice, assets held in one name are, in reality, joint assets.
“While it is true that total equality is yet to be achieved, and women still have less in their pensions than men, the gap is most certainly closing.”