The majority of female employees feel financially unprepared for their retirement, as evidence emerges of a gender savings gap.
The Lifetime Savings Challenge Report 2017 by Close Brothers and the Pensions and Lifetime Savings Association (PLSA) found that 51% of female workers feel financially unprepared, compared to around a third (35%) of male workers.
Only 23% of female employees feel well prepared for retirement, compared to more than a third of men (36%).
When it comes to pension saving, the average amount in a woman’s workplace pension scheme is less than half that of their male colleagues (£53,000 compared with £120,000). Worryingly, women are twice as likely to have less than £5,000 in workplace savings compared to their male counterparts (29% compared with 15%).
Looking at non-workplace savings, the research shows that while around a third of male employees have less than £5,000 in savings, this rises to two in five (41%) among women. The findings also reveal that female employees are saving nearly a quarter less than men in non-pension savings (£221 compared with £305 per month), a difference of over a thousand pounds a year.
This savings gap is perpetuated by a significant pay divide, with the mean annual salary of women surveyed being £27,379 compared with £37,655 for men, nearly 30% less. As many as 42% of female workers don’t think they get enough salary and workplace benefits to save; this figure falls to 27% among men.
Only a third (36%) of women feel confident about choosing the right financial product, compared with 45% of men.
Jeanette Makings, head of financial education at Close Brothers, said: “The savings crisis is thrown into stark relief when looked at under the lens of gender imbalance. Women are not only earning less and therefore saving less, but are significantly less confident about the savings options available and how to choose what’s best for them. Women are more likely to trust friends and family or personal savings websites, which are unlikely to be able to provide suitable and comprehensive information across the entire savings landscape.
“Financial educators, like employers, are better placed to offer guidance and information, but they need to consider the diverse needs of their audience, including what style and content suits the individual members of their workplace. We work closely with employers to deliver effective education incorporating different savings techniques, goals and needs.”