WUNRN
SCOTLAND - PENSION POVERTY LOOMS AS
WOMEN
FAIL TO SAVE ENOUGH FOR RETIREMENT -
REPORT
Young women are not making adequate provision for retirement and face
severe financial hardship, finds Scottish Widows survey
Women are facing
severe financial hardship in later life through lack of adequate pension
planning Photograph: John Stillwell/PA
Young women
are heading towards poverty in later life by saving
50% less than men for retirement, according to a report published today by Scottish Widows. Women
aged between 18 and 29 are saving just £49 a month compared to £111 a month for
men, making average annual contributions of £4,816.50 compared to £7,709 made
by men.
The sixth
annual Scottish Widows women and pensions report, which
questioned 5,000 adults, also revealed that one in three (31%) young women
without a private pension have never thought seriously about saving into one.
And of those young women that do have a pension, four in 10 do not know what
the pension is, compared to one in four men.
Older women
are not faring any better, with half the number of those aged over 51 saving
adequately compared to men of the same age – and they are also uncertain as to
how they will plug the gap. Women aged 51-59 have accrued on average £37,642 in
retirement savings, compared to the
£54,345 saved by men.
The report found widespread
uncertainty among women about their long-term financial future and retirement
income. More than half of women under the age of 50 admitted they are not
preparing adequately for retirement, a rise of 8% on last year's survey.
Two-thirds of pensioners living in poverty are women and the report suggested
this imbalance could worsen.
Almost half of older men (48%)
said the recession has had no impact on their ability to save, but only 38% of
older women said the same. This may in part be due to the fall in the number of
women aged 51-59 in full-time work in the past 12 months – down from 41% to
33%, according to Scottish Widows. As a result, over 42% of older women said
they are pessimistic or very pessimistic about their retirement compared with
32% for men of the same age.
But Scottish Widows found that
women aged 50-59 are making a concerted effort to reduce their debts, with a
fall of over 20% in the past year, although the average owed is still almost
£8,500.
Ian Naismith, head of pensions
market development at Scottish Widows, said: "The findings paint a
worrying picture. Women are saving less than they were a year ago and younger
women are saving the least, which is especially worrying as savers tend to
stick to habits developed when they are young.
"In previous years we have
seen younger women becoming more financially independent, but as that group
moves into their 30s it appears that those coming behind are not continuing the
good work. Attitudes need to change and the major disparity between male and
female saving habits needs to be resolved or even more women will face poverty
in their old age."
Naismith said better education on
how pensions work and the range of savings products on offer is needed.
"Auto-enrolment, coupled with better pension and long-term savings
education, are the key elements to improving retirement provision in the
"Indeed, a measure of the
success of auto-enrolment reforms should be the extent to which they encourage
savings among young women. Whilst everyone generally accepts they will have to
work for longer and retire later, they cannot hide behind this if the right
saving plans are not there in the first place."