Young women need to save an extra £185,000 to reach the same retirement income as men, says a report published today.
The annual Scottish Widows report found that while men currently in their 20s will have saved £350,000 by retirement, women will have only saved £250,000.
Coupled with the fact that women on average live three years longer than men – costing an extra £85,000 in living costs and associated care – women will need an additional £185,000 to enjoy the same level of retirement as men. This would mean a woman saving £210 more a month from age 25 until the day they retire.
The report consequently urged for structural gender inequalities such as the gender pay gap to be tackled and maternity pensions to be enhanced.
Jackie Leiper, managing director of workplace savings at Scottish Widows, said, “It’s well known that the gender pay gap has a damaging impact on women’s retirement prospects. But women face a double whammy: even if we close the pension saving gender gap, pension equality would still not be achieved, because women need to fund a longer retirement and spend more on associated care costs.
“There are ways to help level the playing field – from enhancing maternity pensions to offering better parental leave and financial support for childcare – so that women are no longer financially penalised for raising a family. Of course, we must also tackle the larger structural issues in our society, like the gender pay gap.”