Working women facing massive pensions crisis

Average savings pot is only £51k

WOMEN face having an average of just £51,000 in their pension pots on retirement – £106,000 less than a typical male worker.

Working part-time to balance caring responsibilities for children and then elderly parents has the biggest impact on women’s ability to save for their future.

It results in a 47% reduction in pension savings for females by their late 50s, compared to men.

When they reach their 60s, women have £51,000 set aside for a pension – just a third of the average £156,500 nest egg for a man.

While the proportion of women working is now 71.4% – the highest female employment rate since records began in

1971 – two in five are in part-time roles.

This means many may fail to meet the £10,000-a-year threshold in a single job to be auto-enrolled into a workplace pension. So they will miss out on saving for their retirement, and receiving employer contributions.

This is compounded by the fact that women earn less than men – the gender pay gap is currently 18% – and they live 3.7 more years than men on average. It means smaller pensions must last longer.

The report from The Pensions Policy Institute and Now:pensions found the biggest harm to women’s pension saving occurs in their 30s.

This is the typical age when they are likely to care for children.

However, by their 50s many will also have moved into part-time work to look after their parents or grandchildren – leaving them falling even further behind when saving for retirement.

Joanne Segars, interim chairwoman of trustees at Now:pensions, said: “Not only are women paid less, they are much more likely to take time out of the workforce. This has a huge impact and the part-time pensions penalty can’t afford to be ignored.

“Small changes to auto enrolment could make a big difference for women but to really bridge the gap more need to be done to help mums remain in the workplace.”