Pension saving can be embarked upon through workplace and private arrangements, with the state pension often proving a top up to this sum. However, an issue which has frequently arisen in the sector is gender disparity, with women being negatively impacted when it comes to funds for retirement. Analysis from Barnett Waddingham has shown women have 25 to 45 percent less in their pension pots at retirement than men.
For women who are impacted, there is likely to be less cash available for retirement, which could severely limit their goals in later life.
In addition, with the state pension age rising, many will have to wait even longer to gain support for retirement.
Ms Latham continued: “The driving force behind the gender pension gap is clearly the gender pay gap, especially in the high affluence group.
“Disparity in income is causing a knock-on effect on pension wealth, despite, by and large, women contributing the same proportion of their salary to their pension as men. But other important factors are at play.
“It’s clear women are disadvantaged if they have children or have other family caring responsibilities, as the resulting hit on pensions is stark.
“With more women working in lower skilled or zero-hour contract roles, too many are falling outside the auto-enrolment threshold.
“It’s therefore not enough to simply say that women need to contribute more to close the gap.”
Instead, Ms Latham stated it was important to consider societal, behavioural or fiscal issues collectively.
This, she said, can help everyone work towards a more robust and inclusive pensions framework.
However, while the gender pensions gap can be devastating, it does not always have to be a foregone conclusion.
Instead, women may be able to take action to work towards closing the gap and ensure they have enough for retirement.
Firstly, Ms Latham recommended paying in more to one’s pension, particularly after any career breaks, such as those taken to look after children.
The sooner women take this action, the cheaper it will be to make up the shortfall – as interest compounds over time.
The next issue to consider is how to harness pay rises to work towards retirement goals.
If a person increases their pension contribution at every pay rise, Ms Latham highlighted, they will not notice the impact on the amount they take home each month.
Once again, getting into this habit early will help women to improve their chances of an equitable retirement.
Finally, for those who are saving for a pension as a couple will need to consider all of the options at their disposal.
It may, Ms Latham said, be advantageous to contribute more into one person’s pension scheme, for example if it is more tax efficient, or if it offers better benefits.
If a couple is sharing parental leave this can help to spread pension contribution shortfalls more equally.
But if one parent takes leave and another decides to stay at work, it may be worth sharing pension contributions across both parents’ pension plans for the duration of this leave.
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