Why is it harder for women to save for a pension than men?
‘Research suggests that only 50 per cent of women in their 30s work full-time, compared with 81 per cent of men of the same age.’
The juggling act of life is tough, and planning for your pension often gets side-tracked when financial pressure is applied from all angles. However, according to this year’s ‘Scottish Widows “Women and Pensions” Report’, it’s largely women who bear the burden of limited, personal pension facilities, as 20 per cent would agree they prioritise fiscally supporting their children above preparing to save for their retirement.
In addition to this, 21 per cent of the women in this age group anticipate they can survive on their partner’s pension as their source of income upon retirement – a potentially perilous move, considering the divorce rate has breached its highest figure ever of over 40 per cent.
As the new statutory rate for the state pension will approximate £144 a week from 2016 and only people with 35 years of qualifying National Insurance contributions can qualify, it is important to start building up entitlement.
Under this rate, the average 66 year old woman would need approximately £195,000 to buy that level of index-linked pension with their own savings.
The startling reality is cushioned slightly thanks to compound interest, as the earlier you start saving, the more you will have accumulated upon retirement age.
Starting a family is one of the biggest obstructions facing women and their retirement fund. However, legislation is on side, as it is legally recognised that employers’ continue to pay into a woman’s pension when she is on maternity leave – up to the statutory minimum of 39 weeks.
Even if a woman decides she does not want to go back to work, she can make small National Insurance contributions that will enable her to continue building credits.