It happens in workplaces across the country and crucially, continues all the way into retirement.
The great UK pensions gender gap hits millions of ordinary women rather than a few TV presenters, making their final years much harder.
Women retiring this year will get an average annual retirement income of £14,300 against £20,700 for men, a gap of £6,400 a year, according to research from Prudential.
Women falling behind men financially happens in workplaces across the country
This has actually risen by £1,000 over the last 12 months.
Nearly a third of women believe they cannot afford to retire until their 70s or never afford to retire at all
MIND THE GAP
To a large degree the gender pay gap creates the gender pensions gap, with men earning 13.9 per cent more on average, according to the Fawcett Society.
Kate Smith, head of pensions at insurer Aegon, says: “This means men save more into workplace pensions without even thinking about it.”
Smith says women face another challenge when attempting to build up a pension.
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“They often face a more disrupted savings journey due to maternity leave and working part-time, juggling a career and children.”
However, Aegon’s research shows that women are making things worse by failing to engage with the topic of pensions.
“More than two-fi fths have never reviewed their retirement plans and over a third have absolutely no idea how much they have saved in their pension, far lower than for men.”
The message is slowly sinking in, as women steadily save more in their own name. The average female pension pot has climbed from £16,700 to £24,900 over the last two years, but men still have three times as much, with an average £73,600.
The new governmentbacked pensions auto-enrolment scheme is widely seen as a success in giving 7.6 million low-paid workers a company pension for the first time, with tax relief and employer top-ups.
But again, men benefit most because they earn more, so more is paid into their pension.
Also, far more women fall below the earnings trigger for auto-enrolment of £10,000 a year.
David Fairs, pensions partner at accountancy firm KPMG, says the relatively high number of women in part-time, low-paid work get a raw deal.
“If we reduced the auto-enrolment trigger to £5,000 a year and made 100 per cent of salary eligible for contributions, this would go a long way towards closing the pensions gap.”
More than two-fifths of women have never reviewed their retirement plans
Women also face a massive personal pensions gap, according to new figures published last week by advisers Drewberry.
Its annual Wealth & Protection Survey shows that just 14 per cent of British women have a personal pension compared to 24 per cent of men.
Of these, more than half reported having less than £10,000 in their pot, compared to just one in three men.
Drewberry director Tom Conner says this highlights the worrying level of fi nancial inequality between men and women.
“The result is that 30 per cent of women either believe they cannot afford to retire until they are in their 70s, or can never afford to retire at all.”
Women also face a massive personal pensions gap
MATTER OF AGE
Women are not just falling behind with personal and workplace pensions, they are also being disproportionately punished by increases to the state pension age.
The days when men drew their pension at 65 and women at 60 are being steadily phased out, with the age synchronised at 66 for both genders from 2020.
While few can argue against gender equality, campaign group Women Against State Pension Inequality says this is unfair on almost 3.5 million women born in the 1950s who have to work six years longer than expected before getting their pension, with little notice or time to make alternative plans.
Smith says most are unable to build up a private pension to bridge the gap between the later state pension age.
“This has left many women unprepared for retirement and some in financial despair.”
Women’s state pension age is rising to 67 between 2026 and 2028
Women’s plight could worsen with the state pension rising to 67 between 2026 and 2028, while this month the government announced another hike to 68 between 2037 and 2039, seven years earlier than originally planned.
This fulfils the recommendations of the independent Cridland report in a move that is expected to save the nation £74 billion as life expectancy rises, although growth has stalled lately.
However, it will hit up to seven million people in their late 30s and 40s, who now have to work later.
Kay Ingram, director of public policy at retirement adviser LEBC, is calling on the Government to write to everyone affected to make sure they are aware of the increase in their state pension age.
“The Government has the opportunity to learn from past mistakes so that people can start saving more now to fund retirement at an earlier date should they wish.”
Saving enough for retirement is a challenge for both men and women in today’s era of low interest and annuity rates, but women have been hit harder. For many older women who are either in or close to retirement, it is already too late.
Those still working have now largely been left to their own devices and need to plan ahead and save harder to close the pensions gap.