Women saved an average of £126 less than men into their workplace pensions in 2018, putting aside £433 on average, compared to the £559 saved by their male counterparts, according to research by workplace pension provider Now: Pensions.
Its analysis of the 1.7 million members saving into its pension scheme found that in 2017, the average male member had saved £424, compared to the £334 put aside by female members; this is a £90 difference.
This means that the average woman’s pension pot has fallen from 78.5% of a man’s pension pot to 77.4% between 2017 and 2018.
Just over two-fifths (43%) of Now: Pensions members are female, but they own only 37% of the fund in monetary value.
Now: Pensions’ analysis further suggests that for members earning an average salary, based on mean salaries derived from the Office for National Statistics (ONS), pension savings will grow to £50,514 for men and £40,332 for women over the next 40 years, assuming a 3% investment growth.
If a five-year career break, taken between the ages of 28 and 33, is applied to this estimation, women’s retirement savings fall to £33,986.02; this is 33% less than the average amount saved by men.
Amy Mankelow, director of communications at Now: Pensions, said: “The gender pay gap not only affects women’s working lives, but leaves them more vulnerable to poverty in retirement. Women’s pension savings face a double whammy, as women typically earn less and are more likely to work part-time and take career breaks to care for children or elderly relatives.
“Auto-enrolment does little to address this inequality, as millions of women are prevented from saving altogether as they earn less than the £10,000 auto-enrolment trigger. This means that a large proportion of part-time [employees], who are much more likely to be women, don’t have the opportunity to save in the first place.
“The fact that auto-enrolment minimum contributions remove the first £6,136 of earnings from the auto-enrolment calculation also hits the savings of more women than men.
“We are calling on the government to remove the £10,000 auto-enrolment trigger and get rid of the lower earnings band, to give more women the opportunity to save for their retirement.”