• March 29, 2024
 Gender payment disparity persists after retirement

Gender payment disparity persists after retirement

Recent research has indicated that women will need to save 3% more throughout their working lives to receive the same retirement income as men.

According to Prudential research carried out for Telegraph Money, the difference in pensions between the sexes stems from the gender pay gap.

In real terms, this means that over a 40 year period of making pension contributions, a woman would have to save 13.3% of her salary, whilst a man would only have to save 10.67%.

This is a result of the disparity in pay between the ‘average’ man and woman; over a lifetime, women will need to save a larger portion of their income to achieve the same amount.

Whilst the research is based on the size of a pension pot attained at 65, it’s been suggested that the difference in pay between the genders could be more complex.

Chief executive of the Fawcett Society, Sam Smethers drew attention to the aspects of the pension saving which the report may not accurately reflect.

She stated: “This research shows women are having to save a bigger share of their earnings throughout their working lives if they want to get the same pension in retirement as men. But far from saving more, women are likely to save less than men”.

“Pension saving inequality is actually much worse than this report suggests. The model assumes that women have an unbroken contribution record.

“But we know that women are much more likely to take breaks from paid work to have children or care for others. This widens the pay gap and leads to a pensions gap of 40pc.”

Additional research from Prudential indicates that men retiring this year will be on average £6,400 better off than their female counterparts. The difference is largely down to the gaps in national insurance contributions for women, given that they are more likely to have time off.

Kirsty Anderson highlighted that this problem could be curbed by encouraging women to pay voluntary national insurance payments during a gap in work. The retirement income expert stated: “Women taking time off could, if they can afford to, pay into a pension scheme and not many people know but you can actually make voluntary national insurance contributions.

“At some point you are going to stop earning and at that point you will need an income. The sooner you start to save, even just a small amount, the better off you will be – and that’s regardless of gender.”

Georgia Owen

Georgia is the Senior Content Executive and will be your primary contact when submitting your latest news. While studying for an LLB at the University of Liverpool, Georgia gained experience working within retail, as well as social media management. She later went on to work for a local newspaper, before starting at Today’s Wills and Probate.