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Pension saving is usually accomplished through multiple pots for retirement, including workplace and private pensions. A person will often build these up throughout their lifetime, with their salary likely to be essential for contributing to their retirement fund. However, it appears this is where the difference between men and women begins – and the findings are particularly concerning.
A study conducted by Profile Pensions has shown women nationwide are at risk of receiving retirement incomes which are thousands of pounds lower a year than men.
Women are often left with far less funds at their disposal than their male counterparts, a matter which could significantly impact their retirement.
Less money, of course, means less flexibility and choice when it comes to retirement and this could limit women’s aims and goals for later life.
When looking at the country as a whole, Profile Pensions found the average male pension has a value of £40,084.
This is compared to the average pension value of £24,445 for women, a difference of just over £16,000.
The issue appears to be exacerbated within certain areas of the UK, creating a challenging situation for women.
The study showed Northern Scotland is where the pension gender gap is widest.
Men’s pension pots are almost 50 percent bigger than those belonging to women, with the average value of a man’s pension in the area at £41,603, nearly double the size of the average woman’s pension value – which stands at £20,978.
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There are potentially a number of issues to blame when it comes to the gender pension gap.
However, perhaps most notably is the infamous gender pay gap which impacts women throughout their lifetime.
The Office for National Statistics stated the gender pay gap among all employees was 15.5 percent in 2020.
The gender pay gap is calculated as the difference between average hourly earnings of men and women as a proportion of men’s average hourly earnings.
With women also likely to take more career breaks, such as to look after children or elderly relatives, this could also impact pension saving.
Michelle Gribbin, Chief Investment Officer at Profile Pensions, offered further insight into the matter.
She said: “What we see with these findings, sadly, is that the gender pay gap and the gender pension gap go hand in hand.
“Men, on average, earn more than women, and therefore can save and receive larger contributions from employers into their pension pot.
“It’s clear there’s much more to be done to help women gain the security they need going into retirement.
“Under current UK law, employers contribute three percent to the employee’s pension pot, four percent comes directly from their payroll and the remaining one percent is made up by tax relief.
“Employees are able to decrease or increase this anytime that they see fit.”
For women who are looking to redress the balance when it comes to pension saving, there are a number of actions to take.
Primarily, ensuring one contributes to a pension as regularly as possible is likely to be key.
However, checking one’s state pension forecast through the Government’s online tool can also help women to gain a bigger picture of how much they will receive in retirement.
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