Females are losing out when it comes to having a decent retirement and need to plan better to avoid poverty in old age.
The pay gap, taking time off to have children and the fact greater numbers of women work part-time are all part of the problem.
“Recent data shows some groups are under-saving compared to others. This includes women and the self-employed. Men still account for around two-thirds of pension savings,” says Adrian Walker of Old Mutual Wealth.
It’s the “feminisation” of poverty and it occurs increasingly in old age, says John Macnicol, author of the book Neoliberalising Old Age.
He points to the fact women outnumber men in retirement by two to one. Of the over 65 year olds living alone, 70 per cent are women, and they had an average income of under £400 a week, from state, private and occupational pensions combined.
Government figures show only 37 per cent of women were contributing to personal pensions in 2013-14 – pretty much essential since the state pension is only £6,000 a year, an income that’s below the poverty line. That compares to 63 per cent of men. The gender discrepancy is something the government hoped to change when it brought in automatic workplace pensions last year.
Some older women are also battling the rising state pension age. Historically women were given the state pension earlier than men, but the government is equalising the dates payments start for both sexes. It’s fair in principle, but will have a sudden and disproportionate impact on women born after 6 April 1951, says campaign group Women Against State Pension Inequality (WASPI).
This cohort suddenly face years more in the workplace with no time to prepare. The Department for Work and Pensions sent letters to 58-59 year old women stating their expected pension age of 60 was being delayed. The average length of notice people were given was one year and five months, according to figures from a Freedom of Information request.
It’s a sorry situation, but what working-age women can control now is how much they save, so they are not caught out by sudden changes to the system.
“Some of these things are out of your hands,” says Lydia Fearn from Redington. “But what you can do from an individual perspective is plan and control your own future. Women need to think about saving for retirement, and the sooner the better.
The state pension may be meagre but it will help on top of your own savings. But only half of all women qualified for the full state pension in 2013. Females tend to lose out because a person needs 30 years of national insurance contributions to receive the full rate.
“This can be a particular issue for those that take career breaks or reduce hours due to having a family or caring for a relative. This tends to be more of an issue for women as it has historically been seen to be their role,” says Claire Trott of Talbot and Muir.
“The main issue is that females won’t need any less to retire on and in many cases they will need more because women do tend to live longer.”
Trott recommends women check how much state pension they’re entitled to on the government website gov.uk/future-pension-centre. Ahead of any career breaks it’s a good idea to budget pension contributions too, says Fearn.
It can feel impossible to put money away for a pension on top of everything else that needs to be paid for. Anyone battling to save money should consider putting money away on payday, says Walker. “A simple mantra to try to live by is to spend what you have left after saving,” says Walker.