More than half of female employees admit to feeling financially unprepared for their retirement, according to new research which shows a gender savings gap.
The Lifetime Savings Challenge Report 2017 by Close Brothers and the Pensions and Lifetime Savings Association, which seeks to understand how employees are saving, where they need help and the level of support available, reveals that there is a clear and distinct gender savings crisis in the UK which needs to be addressed. Some 51% of female workers feel financially unprepared for retirement compared to 35% of men. Only 23% of female employees feel well prepared for retirement, compared to more than a third of men (36%).
When it comes to pension saving, the average amount in a woman’s workplace pension scheme is less than half that of their male colleagues (£53,000 vs £120,000). Women are twice as likely to have less than £5,000 in workplace savings compared to their male counterparts (29% vs 15%).
Looking at non-workplace savings, the research shows that while around a third of male employees have less than £5k in savings, this rises to two in five (41%) amongst women. The findings also reveal that female employees are saving nearly a quarter less than men in non-pension savings (£221 vs £305 per month), a difference of over a thousand pounds a year.
This savings gap is perpetuated by a significant pay divide, with the mean annual salary of women surveyed being £27,379 compared to £37,655 for men, nearly 30% less. This is a key factor in saving: 42% of female workers don’t think that they get enough salary and workplace benefits to save. This figure falls to 27% of men.
However, the study says income is not the only relevant factor in savings activity. It highlights the importance of financial confidence, saying only a third (36%) of women feel confident about choosing the right financial product compared to 45% of men. The study calls for comprehensive financial education which takes into account gender issues.
Jeanette Makings, Head of Financial Education at Close Brothers said: “The savings crisis is thrown into stark relief when looked at under the lens of gender imbalance. Women are not only earning less and therefore saving less, but are significantly less confident about the savings options available and how to choose what’s best for them.
“Financial educators, like employers, are better placed to offer guidance and information, but they need to consider the diverse needs of their audience, including what style and content suits the individual members of their workplace.”