A pension warning has been issued for all women born before 1998, as fresh data reveals that women retire with almost half the wealth accrued by men. According to new research, this disparity begins as early as age 28.
Key Findings at Age 28
The research shows that 22 per cent of men aged 28 consider retirement a financial priority, compared to just eight per cent of women of the same age. AJ Bell warns that women do not prioritise their pensions at the same rate as men until age 41, by which time it is impossible to catch up.
Expert Insights
Charlene Young from AJ Bell explains: "At 28, many women will be starting to think about getting married or starting a family, and graduates might also be looking over their shoulder at their student debt balance. As many take career breaks, cracks start appearing from missed or lower contributions in the key years when pension growth is so important. These cracks manifest as a chunky gender pension gap by retirement."
Maike Currie, Vice President of Personal Finance at PensionBee, offers a mixed view: "Seeing women out-contribute men – for the crucial self-assessment month of January – is very encouraging, showing more women in their 40s are in self-employment and/or are higher rate tax payers and conscious of the importance of making pension contributions. However, across other age groups, the picture is still very uneven, despite improvements on previous years. Women aged 18 to 29 contributed 7 per cent less than men, while those aged 60 to 69 contributed 26 per cent less, a gap that reflects a lifetime of compounding disadvantage rather than disengagement."
Systemic Reform Needed
Ms Currie adds: "There is clearly growing engagement and a determination from women in their mid-40s in particular to bolster their retirement savings. However, closing the gender pension gap will require systemic reform. Women remain over-represented among the UK's 'invisible workers' – falling outside the net of auto-enrolment, which has very much been designed around formal employment structures and the payroll."
