‘10% of young women opting out of auto-enrolment’

New research from Scottish Widows shows 10 per cent of young women are opting out of their pensions and experts warn the long-term consequences could be stark.


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Ten per cent of young women in their 20s have opted out of their employer’s pension scheme, despite almost a quarter saying they would be frustrated if they couldn’t retire by the age of 60, according to research from Scottish Widows.

The survey of over 6,000 people found that of those women aged 22 to 29 who opted out of being automatically enrolled into their employer’s pension scheme, 29% said it was because they couldn’t afford to keep up regular pension contributions, and 14% said they would prefer to spend the money now.

Scottish Widows says that, while 19% of men start paying into their pension by age 22, just 14% of women do this. It adds that women are saving less than men toward an employer pension at nearly every point in their lives and acting early is vital, given the pension gap also grows with age, with the difference between pension values of men and women being 10% at age 25, and 50% at age of 50.

The survey also found that 35% of young women don’t know how much income they would need for a comfortable retirement and nearly two in three (62%) are concerned about completely running out of money in retirement.

Jackie Leiper, Managing Director, Scottish Widows, said: “Our research shows a significant gap between the expectations of women, and the action taken to meet those expectations. Alarmingly, 10% have opted out of their workplace pension, meaning they are missing out on compound interest gains and crucially, the ‘free money’ that comes with employer pension contributions. Opting out of your employer’s pension scheme is tantamount to taking a pay cut.

“The hard truth is, by the time these women reach the end of their working lives, they may face a much harder retirement compared to those who have consistently contributed. Compounded further by often having to take enforced career breaks. The good news for anyone in their twenties though is that time is on their side.”

Ellie Austin-Williams, @thisgirltalksmoney, adds: “It’s scary to see the contrast between retirement expectations and the reality that many women in their 20s will face, but it isn’t surprising. Speaking to my community online, it’s clear that young women want to invest in their financial future but the cost of living crisis has made it more difficult than ever to prioritise their pensions.

“The challenge is that paying into a pension regularly from the start of your career is essential, especially given the boost provided by a workplace pension. Plus, it’s crucial to closing the gender pension gap which can grow to £100k. Through raising awareness of the importance of a pension and the impact of compounding over time on your pension pot, the hope is that more young women can take control of their future savings today.”

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