52% of women are now saving adequately for their retirement compared to 60% of men, according to the latest Scottish Widows Women & Retirement Report.
Yet while this maintains the record high levels achieved in 2015, the gap between men and women has widened since 2014, when 50% of women were saving adequately compared with 55% of men.
Pessimism levels are also higher among women, with 57% concerned they are not preparing adequately for retirement, compared with only 41% of men.
Shifting patterns in employment among women appear to be impacting their ability to save for retirement. Close to 1.5 million women in the UK are now self-employed – a 22% increase in four years and twice the rate of self-employed men. 36% are saving adequately for retirement, compared with 47% of self-employed men and 58% of employed women. The findings suggest this trend is set to continue, with 62% of self-employed women claiming they don’t think they will be able to save any more in the next 12 months, compared with 46% of men in the same position.
Additionally, with 16% of women working part-time, a significant proportion could be exposed when it comes to saving for their retirement due to the fact that automatic enrolment is only triggered when employees earn £10,000 a year or more. Twice as many women as men (6% versus 3%) are working at least two jobs, yet still failing to qualify for automatic enrolment as the amount they earn from each is below the £10,000 threshold.
Women also appear to be more negatively impacted by their personal circumstances than men, with only 42% of divorced women saving adequately compared with 47% of divorced men. Divorced women have a bleak outlook on their financial futures, with seven in 10 (70%) thinking it is unlikely that they will be able to save more in the next 12 months than they do now – compared with an average of 60% of women overall.
Younger women are the least optimistic about their retirement, with only 18% of women aged 18-29 feeling positive compared with 25% of men in the same age group. The findings suggest that a lack of understanding of retirement planning is to blame; a third (33%) of 18-21 year old women claim that they would be encouraged to start saving if they had better access to information on pensions or retirement planning. Two-fifths (42%) aged 22-29 would be encouraged if they could see the value of their pension alongside their other savings, either online or via an app.
Automatic enrolment could be a particularly effective for young female savers with one third (33%) of 22-29 year olds saying it would encourage them to start paying into a pension, compared to 29% of men.
Jackie Leiper, retirement spokesperson at Scottish Widows, said: “It is encouraging to see that over half of women are making sufficient savings towards their retirement, but a growing savings gap persists in the UK. It’s vital that we address this to ensure women feel reassured about their finances and prepared for retirement, whether they are self-employed, work for a large employer, are divorced, married or single.
“More also needs to be done to make certain that automatic enrolment does not marginalise female savers who may not qualify for the threshold. And this means we need to engage innovatively with female millennial savers, who are just beginning to put money aside for their retirement. Our research shows they are crying out for information, and learning good savings habits now will help ensure they are better prepared for later life. Providers, employers and the government alike must also explore further initiatives to help women of all ages save in other ways if they don’t qualify for a workplace pension.
“At Lloyds Banking Group, we are committed to creating an inclusive and diverse workforce and have a public target for women to fill 40% of senior management roles by 2020, as outlined in our Helping Britain Prosper Plan. It is vital that we focus not just on encouraging women to reach their potential in their careers, but also on ensuring they are reaching their full potential when it comes to saving for retirement. So we are working closely with internal and external women’s networks to drive behaviour change. Through this activity, we hope to continue raising the profile of this important issue, encouraging women to stop and think about their later life finances early on in their careers.”