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Working with employers to help close the pension savings gap
Catherine Stewart, Scottish Widows
Women continue to trail men in saving adequately for retirement. Just 52% women are putting aside enough for retirement, compared to 59% of men, and on average, women save just over half as much as men in defined contribution pensions (£81pcm compared to £149pcm)*. We want to work with employers, government and the industry to help close this gap and help more women plan for their retirement.
Our 13th annual Women and Retirement Report focuses on the impact of divorce on both men and women’s retirement plans. It also continues our work in examining the policy and industry changes that might support more women in saving for their future.
There’s an important role for government to play and we’re recommending a number of key changes to improve automatic enrolment. These include extending coverage to more part-time and younger workers. This will help women in particular, as their savings tend to be more impacted by career breaks and periods of part-time work, due to parental or caring responsibilities.
But we’re also really interested in how employers can help. Before employees embark on maternity or paternity leave there will be a lot of information to share with them, and we’d like to see pensions feature prominently in these conversations.
Depending on the rules of the scheme, it may be that the initial period of leave has no or minimal impact on the employee’s pension. But if they choose to stay off work beyond the paid leave, or if they come back to work on reduced hours, the impacts can be significant and they form the key drivers behind the persistent savings gap.
So, to support employers, we’ve launched a new guide alongside this year’s Women and Retirement Report. It’s available on our Employer Hub, and explains the savings challenges women are more likely to face and outlines useful information employees might need to consider. It’s not limited to parental leave, and it covers a range of things that could apply to all employees.
*Source Scottish Widows Women and Retirement Report 2017