Women put aside less money for their retirement than men, according to a YouGov survey commissioned by Scottish Widows.
The gap between the amount men and women are saving for retirement has grown by over 10% in 12 months, with women now putting aside an average of £776 per year less than men for use in old age. Last year, women saved £700 on average less than men. This means that a 30 year-old woman who maintains this average annual rate of saving will face a shortfall of £29,800 in today’s money, compared to her male counterpart, if she chooses to retire at 65 years-old.
The poll also reveals that more women feel worse off than a year ago compared to men.
- Half (50%) of British women say they were better off last year, while 45% of men agree with this
Women less likely to save
Women are also less likely than men to save any money at all for retirement.
- Over a quarter (26%) of female adults in Britain say they are not putting any money aside for their retirement, compared to just under a fifth (19%) of men
- This figure has increased from last year, when only 23% of women were not saving for their old age
Women prioritise debt repayments and living expenses
Almost a third (31%) of British women prioritise debt repayments over saving for their retirement, as the average amount females owe, excluding mortgages, has risen from £10,174 in 2011 to £10,922 this year, which is an increase of £748. This means women’s average monthly saving has fallen from £130 last year to £95 in 2012. In comparison, the average for men has risen from £174 to £185 during the same time period.
For a 30 year-old woman, this £35 drop in monthly savings could reduce her final fund by £16,000 in today’s money if she retires at 65 years-old. The slight increase in men’s retirement savings could see a 30 year-old man’s fund bolstered by around £5,000 by the time he reaches the average retirement age of 65 years-old.
Over four in ten (42%) women also say they place living expenses above saving for old age.
Lynn Graves, Head of Business Development, Corporate Pensions at Scottish Widows said: “Important differences in lifestyle such as being more likely to work part-time or have a full-time caring role, mean women often find it more difficult to save for the long term and retirement... While women are right to focus on making sure their debts are manageable, other sacrifices may need to be made to ensure retirement planning is in place.”
Scottish Widows is Scotland’s first mutual life office, which works to help people plan their financial futures. It is part of Lloyds Banking Group.