Gender Pension gap widens

by Gill Montia

Story link: Gender Pension gap widens

Research from Scottish Widows confirms a significant difference in the pension prospects of women and men.

Apparently, only 41% of women earning over £10,000 a year currently save into a pension plan, compared with 54% of men.

The figures indicate that the gender pension gap is getting worse, as the proportion of men making adequate pension provision increased from 49% in 2006, to 54% in 2007. However, in the case of women, the figures remained the same.

The average amount saved by women who are paying money into a pension amounts to only 66% of the average amount paid in by men.

According to the survey, only 34% of women are members of a defined benefit pension scheme, such as a final salary scheme, compared with 46% of men.

Eighteen per cent belonged to a defined contribution occupational scheme, compared with 22% of men.

Among those paying into a defined contribution pension, women pay in £84 a month on average while men contribute an average of £128 a month.

In addition, employers pay more into men’s pensions than women’s. A typical employer contribution is worth 6.5% of a man’s annual salary, but only 5.7% of a woman’s.

Women also have less money to save because on average, they earn 62% of the average male salary and at the same time, children have a major impact on their finances.

They are more likely than men to be spending their money on their children and also may either give up work or work part-time, to look after them.

Thirty-five percent of working-age women are not contributing to any pension scheme, compared with just 22% of men.