Women who are now aged between 25 and 34 could end up with a pension that’s 11% smaller than men when they retire, according to data analysed by Fidelity International.
In its , the investment company calculated that the average pension for a man at the state pension age of 68 will be worth £142,836, compared to only £126,784 for women.
The report cited career breaks to look after children, as well as to care for elderly relatives, as some of the factors that were causing the gap.
Maike Currie, Investment Director at Fidelity International, reportedly that the industry itself was also partly to blame for the gap because it had failed to engage with women.
Gap could be closed if women contributed additional £35 per month
The investment company found that the gap could be closed if women were to dedicate an extra 1% of their salary towards their pensions in their early careers. It said that this equated to an additional contribution of £35 per month on average, for 39 years.
In the report, Ms Currie said that a
“lack of time, confidence, access to the right information, industry jargon and not knowing where to start”, were just some of the obstacles that had stopped women from believing that investment was “for them”.
She pointed out that until these obstacles were addressed, women’s financial power could not be unlocked.
“Women favour the perceived caution of cash”
Ms Currie also pointed out women tended to favour the ”the perceived caution of cash”, rather than putting more money into their pension or even utilising “the tax-efficiency of stocks and shares ISAs”.
Over the last ten years, cash savings have offered very little return, as interest rates have been low.
Pension gap a “particular concern” for women over the age of 55
The report said that the pension gap was a “particular concern” to women aged 55 years old and over. When surveyed, 43% of this group did not know their pension’s value and 57% did not know where their pension was invested.
It also revealed that out of those who took part in the survey who hadn’t yet retired, over half “expressed some level of uncertainty as to how comfortable their retirement would be”.