The findings by the Pensions Policy Institute (PPI) suggest women retiring in 2020 were due to receive just £11,760 a year on average in total pension income – including the state pension. In comparison, this figure was £16,330 on average for men – a pension income gap of 28 percent.
As well as with regards to pay and pensions, gaps between genders also exist when it comes to investing.
It’s estimated the gap between men and women investing is 67 percent.
Research from the wealth manager InvestEngine, meanwhile, shows that 78 percent of their account holders are male compared with 22 percent being female.
Simon Crookall, founder of InvestEngine, has warned the statistics and trends could potentially create “the perfect storm” for retirement poverty for millennial women.
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He told Express.co.uk: “Whatever people have heard about the pay gap between women and men, the gender pension gap is more like a chasm, with industry research showing women having as little as 50 percent of the retirement savings of men.
“Even when the state pension is included, there’s still a gulf between the retirement incomes of women and men — women receive thousands of pounds of less a year on average [according to the PPI research].”
“Lower average earnings than men, more part-time working, and having time out of paid work caring for children or older relatives, all mean women are likely to save less for retirement.
“Even if women pay the same contribution rate as men to a workplace pension — five percent for example — if they’re on a lower salary then their five percent is worth less in pounds terms.
“Britons generally should be saving more for retirement, but for women the prospect of smaller pensions and longer retirements than men makes this even more important.”
According to Mr Crookall, equality means women actually need to invest more than men.
“Equality isn’t enough — women don’t just need to catch up with men on retirement savings, they actually need more in their pension pots because they’re likely to have longer retirements than men,” he said.
He also addressed the option of investing savings, but it’s important to note that capital is at risk.
“Women’s savings have to last longer: some industry studies have shown that women need to accumulate up to seven percent more in savings than men, to have the
same income through retirement,” he said.
“Women are already on the wrong side of the gender pensions gap, and pandemic-related job loss may well exacerbate that.
“So it’s all the more important that women work the savings they have as hard as possible, which for many means having more invested in the stock market and less in near-zero interest savings accounts.
“For women wanting to boost their long-term savings to catch up with men, the benefit of stock market investing over keeping cash on deposit can be stark – especially given the pitiful bank rates available today.
“For example, if you put £100 every month into an account paying 0.1 percent for the next 25 years, you’d end up with £30,390.
“Contrast that with investing the same amount in the stock market where potential returns might average five percent a year, and you’d end up with £58,811 – potentially near-double what you’d have from cash.
“Looking back over the last 10yrs, leaving £10,000 in your bank account would have
returned you just £10,442, whereas the same amount invested in a globally diversified portfolio would have seen your money grow to £29,173 – nearly three times your return from cash.
“Clearly demonstrating how unhelpful leaving your money in the bank can be when saving for later life.”