Pension news: Women could end up £41k worse off than men at retirement | Personal Finance | Finance


For part-time workers the gap is even wider, at £72,500. Workplace pension scheme Nest calculated that a man working full-time could have £178,871 saved, while a woman could amass £137,863. With part-time work, a man could potentially end up with £161,999 while a woman could save £89,449.

The calculations, based on average UK wages, made several assumptions, including about investment growth and that people started saving aged 22 and retired at 68. But many women spend much of their lives working part-time to juggle caring responsibilities for children and other relatives.

Covid-19 has also had a significant impact on people’s financial situation and outlook.

Women saving with Nest were more likely to say they were only just about managing to make ends meet – at 34 percent compared to 25 percent of men.

Nest said there are some small steps that people can take to help their pension pots grow. It suggested that workers should not wait until they are 22 to be automatically enrolled into a workplace pension. They may find they can opt in from 18, which would add as much as £12,500 to their final pot.

Also, adding as little as £2.50 a week extra could potentially grow it by £13,600, Nest said.

It can also pay to know where you stand with your pension.

During parental leave, many workers are entitled to full employer pension contributions based on their salary rather than statutory pay, Nest said.

Steady employer contributions during two 12-month maternity breaks could mean an extra £1,700. Nest spokeswoman Zoe Alexander, said: “Women face systemic challenges in saving for their retirement.These begin at the start of their working life and have a ripple effect throughout their life.”

Phil Brown, from workplace pension scheme The People’s Pension, said: “Our own research into the ‘motherhood penalty’ shows that women who take a career break or reduce their hours to care for their families lose out on pensions.”

Helen Morrissey, pensions specialist at Royal London, said: “A mix of part-time work and time out of the workforce blows a hole in women’s retirement planning that is difficult to recover from.”

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