Pension warning: Women should start saving earlier than men for this reason

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Pension saving can mean many people enjoy a comfortable retirement after leaving their working lives. Many will save decades in advance to ensure they have enough to see them through their later years. However, a recurring issue noticeable for women is the pension savings gap, which often sees women save less through various arrangements on average when compared to men.

The savings gap has been created by a number of issues including employment, type of work, and childcare, but can all have a detrimental effect on how much women manage to put together for retirement. spoke to Jackie Leiper, Managing Director of Workplace Savings and Contributions at Lloyds Banking Group concerning women’s savings.

Ms Leiper, who is also well-known for her work on women in retirement, explained how women are often left worse off in later years when compared to their male counterparts.

As a result, it may follow that women wish to save at an earlier date to help them accumulate enough money for retirement.

She said: “In 2019, the government statistics showed that in that year, a woman on average had a fifth of the pension pot of a man. Women had about £30,000, and men about £180,000.

“The type of job a person picks provides the first difference, but motherhood and relationships are probably the next key moments where changes occur.

“In the UK, we are still pretty much in a 1950s model, where women are much more likely to take time out to raise children than men. And while employers have implemented loads of fantastic policies, the take-up on those are still very low.

“Culturally in the UK, we have quite a challenge in creating a level playing field.”

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Ms Leiper said she would like to see more open conversations in relationships about money to potentially counteract the negative effects of a savings gap, and long term impacts for women.

However, she also drew attention to the later years of women compared to men, and how this was likely to affect pension saving and preparation.

She added: “Women live on average four years older than men, so they will actually need more pension money to get them through retirement.

“Therefore, women need to save more and ideally start earlier. They have bigger ground to make up, and more issues to deal with.

“Women, of course, can no longer rely upon their husband’s National Insurance contributions to assist their State Pension sum either.

“The older 1950s-esque system was based upon the man being the breadwinner, and the woman being the homemaker, but things have changed substantially since then, meaning this is not always the case.”

As a result, then, it is often vital for women to take their pension savings journey into their own hands.

Ample preparation for retirement is key, and will ensure women have enough to get them by in their later years. 

Ms Leiper concluded: “What I would state unequivocally for women is that they cannot rely upon men and their savings.

“If I had one piece of advice to give to a woman, it would be to make sure they are actively making their own choices about their finances – even if these are shared.

“Couples should ultimately be ware of what they have, but make sure they both have enough to see them through.”

While reform to pension saving has been called for, in the meantime, Britons can approach a pensions adviser for more assistance.

An independent adviser is likely to be able to provide tailored assistance for those looking to boost their pension income, or ensure they have enough for retirement. 

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