Pension gender gap widens

Monday 22 October 2012

SCOTTISH women are likely to be nearly £30,000 worse off than men in their retirement, new research has revealed.

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MATTY SUTTON

The gender gap in pension saving has risen by 10% in a year.

The eighth annual Scottish Widows Women and Pensions Report shows the gap between the amount men and women in Scotland save for retirement has grown to a record high, suggesting women are being hit harder by the economic downturn. Women are saving an average of £720 per year less than men for old age, compared to the £617 gender gap recorded last year.

A 30-year-old woman who maintains this average rate of saving will face a shortfall of £27,600 in today's money, compared to her male counterpart, if she retires at 65.Just less than half of Scottish women report feeling worse off than a year ago, compared to 41% of Scottish men, the report said. The report also found the number of women saving nothing at all for retirement has increased to 24%, compared to 16% who reported not saving last year. Separate reports have suggested women are more likely to spend spare money on their children rather than save for the future.In comparison, only 14% of men admit to saving nothing for retirement. Lynn Graves, head of business development for corporate pensions at Scottish Widows, said: "Important differences in lifestyle, such as being more likely to work part-time or have a full-time caring role, mean women often find it more difficult to save for the long term and retirement. "It has therefore never been more important for the pensions industry, Government and employers to raise awareness of this gender gap in retirement savings and help women prioritise their pensions."Results suggest about one-quarter of Scottish women are prioritising debt repayments over saving for retirement.As many Scots continue to face pressure on household finances amid wider economic uncertainty, it appears long-term saving is being side-lined by many women. In Scotland, 34% of women prioritised living expenses above saving for old age and nearly one-third said they would increase long-term saving to "save for a rainy day". But the report also showed a positive shift in attitudes among women who are paying into pensions, many of whom are reluctant to cut contributions. Meanwhile, a survey by banking group HSBC revealed that more than half of family members who give money to first-time buyers expect it back. With one in five first-time buyers in the UK receiving money from their family in the last year, the research shows 52% of family members fronted the cash with an expectation it would be paid back. Nearly three-quarters of that group (73%) want to be paid interest.HSBC said the bank of mum and dad is also more likely to ask for interest if the house purchase was being made with a partner, with 75% of family lenders seeking the additional return in these cases, compared to 69% of those lending to a sole purchaser.The average cost of a first home in Scotland is about £107,632, and many first-time buyers resort to parents to help fund the deposit.Peter Dockar, head of mortgages at HSBC, said: "Family support has become an important part of the first-time buyer financing mix. However, the research shows that many relatives would like to be repaid at a later date."

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Pension gender gap widens

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