National adviser survey finds British women are being left behind on the pension front.

 

 

Our latest national survey of working Britons makes grim reading, especially if you’re in the 46% or so of the workforce who are women! This year our findings included the fact that, despite the ongoing success of auto-enrolment, over 21% of Britain’s female workforce still have no pension provision of any kind.

 

We found that just 14% of British women currently have a personal pension (compared to 24% of men) and that, of those women who have pensions, 53% reported having less than £10,000 in their pension pot (34% for men). Meanwhile, three-quarters of all working women in this country report having less than £50,000 in pension savings.

 

Unfortunately, as women represent the majority of the UK’s part-time workers, we should, on average, be making use of personal pensions far more often than men. But with almost a quarter of employed women earning less than £11,000 a year, a great many will fall beneath the £10,000 a year earning ceiling for auto enrolment, which leaves women in this group to fend for themselves when it comes to pensions.

 

Not surprisingly, we found that Britain’s female workers are notably less optimistic about their financial futures than their male counterparts. Some 52% of women expect to be worse off than their parents when they retire and only 22% believe they’ll be better off (compared to 39% and 29% for men respectively).

 

In fact, 14% of the women working today don’t expect to ever be able to afford to retire, while another 16% don’t expect to be able to retire until they’re in their 70s.

Women even expect to inherit less than men although, to be fair, we should win out here as we still get a better deal when it comes to lifespans!

 

Our results highlight the worrying level of financial inequality between men and women that still persists in this country. This is timely as, thanks to the princely excesses of the BBC, the ‘gender pay gap’ has hit the headlines once again. This is an issue that won’t be going away anytime soon as from 6 April this year British employers with more than 250 staff have been required to publish ‘gender gap’ reporting on their business.

 

As in the case of the Beeb, which has a pre-existing covenant to report the highest salaries it pays, the early results from this have only reinforced how women, on average, still fall way behind men when it comes to what they earn. Indeed, our own findings included the fact that men are more than 2.5 times more likely to be higher-rate taxpayers than women.

 

There are clearly a number of important factors at play here and we wait to see how the debate evolves at the national level. In the meantime, Drewberry’s research has highlighted the role that employment patterns play when it comes to earnings.

 

Statistically, women still account for a much higher percentage of Britain’s part-time workers. Just over 28% of the women surveyed were part-time employees compared to less than 9% of the men. Meanwhile, 84% of the men were in full-time employment compared to only 64% of the women we spoke to. 

 

Partly as a result of this, we found that 24% of all employed women in the UK earn less than £11,000 pa, compared to just 9% of men while 66% of women surveyed earn less than £25,000 pa (compared to 42% of men).

 

This provides a partial explanation as to why so many of the working women we spoke to – almost 1,800 from across the UK – reported having less than £200 a month available in discretionary income (what’s left after you’ve paid your taxes and your basic living costs). In all, just under 50% of Britain’s women put themselves in this category.

 

Little wonder then that 56% of working women described their finances as ‘just about managing’ (JAM) or worse.

 

As advisers, we’d like to see young people leaving school with at least a basic understanding of how pensions work. Sadly, only 29% of the women we surveyed understood that pensions pay tax relief compared to 41% of men – and neither finding is encouraging.

 

We think that every working Briton needs to recognise that a pension is an essential piece of kit – it’s not something that can be put off or ‘managed without’. Unfortunately, more than 21% of employed women in this country still have no pension of any kind and this must change.

 

To help working Britons better prepare for retirement, Drewberry created its Pension Pot Calculator, which works out the future value of your pension pot based on your contributions and illustrates how long it’s likely to last based on the level of income you decide to draw.

 

See the full data from the annual Drewberry Wealth & Protection Survey.