Diverse saving priorities contribute to the gender pension gap with women having less confidence in their retirement savings
London – 35% of women believe they will continue to work past the age of 70 in comparison to just 29% of men. Regardless of this extra measure, only 33% of women feel confident they have enough resources to live comfortably throughout retirement compared to nearly half of men (49%) according to research from LifeSight, Willis Towers Watson’s UK DC Master Trust. The Global Benefits Attitudes Survey (GBAS) 2017, which looked at retirement expectations, found that saving for retirement is not a key financial priority for women, who say they are more focused on paying off debt and funding ongoing housing costs than men.
Despite the lack of confidence women have in the adequacy of their retirement resources, the research* finds that saving for retirement is still not one of their top five financial priorities. Women instead focus on the general costs of day to day living (73%), housing costs (60%) general savings (58%) and paying off debt (45%).
47% of women agree that their employer’s retirement plan meets their needs, compared to a slightly higher figure for men (51%). Yet, a work retirement plan is the primary means of saving for retirement for 74% of women, in comparison to just 66% of men. This suggests that, in spite of recognising their work retirement plans might not be sufficient, women are more reliant on them for retirement income than men, who are more likely to have other sources of income in retirement.
Harriet Hayward, client director for LifeSight, said: “The research highlights an important issue for the pensions industry. Whilst employers need to help their entire workforce understand the benefits of both their workplace pensions and long-term savings more generally, it is clear that companies need to do more to cater for women. The industry can help by offering more tailored, clear communication around women’s specific life paths, helping them to understand the impact of part-time work and career breaks, and the best way to plan and budget when it comes to retirement savings.”
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However, there are tools in the wider financial market that could be used to help women better understand their retirement savings that are not currently utilised by the pensions sector. The research showed that only a third (35%) of people use the internet or mobile apps to access information on their retirement plans, compared to over two-thirds (69%) for banking or credit cards and half (49%) for savings and financial investments. Yet, the use of mobile apps could simplify pension fund information, and make retirement savings more accessible for busy women with varying financial concerns.
Hayward went on to say: “Times have changed, and as other industries embrace technology, the pension sector is falling behind. Pension providers need to offer more robust and effective communication methods, which will go a long way to increasing employee understanding and engagement. Optimising new technology and modernising communication to make pensions more relatable is essential to help improve the retirement outcomes of not just women, but everyone.”