Women falling way behind in personal pension planning

Pension Review Service survey finds women lag male counterparts by a staggering 75 per cent

women and pensions

Women are falling way behind men when it comes to personal pension planning, according to retirement experts The Pension Review Service (PRS).

The specialist service has carried out a survey (see Note 1) of its private pension planning clients and found that men not only hugely outnumber women planning for their retirement – but are also saving considerably more into their plans.

In a sample of 1,000 clients in the 18 months to October 2018, the PRS found the average pension pot to be £250,488.

But while men had squirreled £274,901 into their pots, women lagged by nearly a third, with savings of just £181,181.

And out of a total sample of 1,000 clients, the clear majority – 75 per cent – were men, while just 25 per cent were women. The typical age of those seeking pension advice from PRS is 55 for both men and women.

“Effectively our data reveals that women are way, way behind their male counterparts,” said Mark Abley, managing director, PRS.

“Working women at age 55 now are facing a double whammy of having to hang on until they are 66 to qualify for the State pension – and lagging way behind men when it comes to their own personal pension.

“If our data is anything to go by, many working women will struggle to finish work before their 66th birthday.

Data from PRS has also found that length of savings’ time is one of the keys to an early retirement – to give your pension pot as much time as possible to benefit from the effect of compound returns.

A 30-year-old who starts putting aside £500 a month, increasing with inflation, could build a retirement pot of around £476,000 by the time they’re 55, the service has found.

“Regular saving into a pension fund means the contributions are drip fed into investment plans which are in turn put to work in the markets – a good pension adviser will be able to demonstrate how to achieve maximum returns, depending on the client’s appetite for risk,” he said.

“But the reality is that most people who come to see us are already in their mid-fifties – while most have been saving for many years, we would like to see more women try to build up their retirement pots,” added Mr Abley.

“Pensions are exceptionally tax friendly investments: the pension provider will reclaim the basic rate of tax on your behalf and add it to your pension. This is equivalent to a 25% top up,” he added

Last modified: November 15, 2018

Written by 12:10 pm News & Views