Men Better at Saving for Retirement Than Women: Report
The gap in the amount women and men save for retirement in the U.K. has reached a record high, according to the latest Women and Pensions report from investment firm Scottish Widows.
The gender gap in savings has increased 10 percent in the last year according to the report, equating to a gap of almost 30,000 pounds ($48,100) between men and women's retirement savings.
"In terms of savings put aside for retirement, women are now saving an average of 776 pounds per year less than men for use in old age — significantly higher than the 700 pound gender gap recorded last year," the report states.
The survey of 5,200 adults revealed that the number of women saving nothing at all for retirement has also increased since last year, with 26 percent of women failing to put anything aside for old age compared to 19 percent of men.
Lynn Graves, Head of Business Development, Corporate Pensions at Scottish Widows said that women's lives were more fragmented and thus it was harder to save.
"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," Graves said.
"It has therefore never been more important for the pensions industry, Government and employers to raise awareness of this gender gap in retirement savings and help women prioritize their pensions."
The growing pension deficit and decrease in employee pension schemes has not been unnoticed by the U.K. government which is introducing a policy of auto-enrolment on pension schemes. According to a recent report by the Melbourne Mercer Global Pensions Index nearly three out of every four adults in the U.K. did not pay into a pension in 2009.
Pension reform and raising the retirement age is seen as urgent by many international governments as populations live longer and fertility rates decrease, leading to a smaller workforce and a larger pension- reliant aging populace.
A 'Carpe Diem' Attitude
Economic uncertainty and the pressure on household finances in Britain is having an effect on prudent money management, according to Scottish Widows, with long-term saving sidelined in favor of a short-term approach.
The survey found that a third of women (31 percent) are prioritizing current debt repayments over saving for their retirement, with the average amount owed (excluding mortgages) jumping from 10,174 pounds last year to 10,922 pounds in 2012.
42 percent of women have prioritized living expenses above saving for old age in the last year with most of those surveyed citing "saving for a rainy day" (an unforeseen situation) as a reason to save, rather than retirement.
Graves said the "rainy day" attitude reveals that many women view their savings as a pot to dip into to cover unexpected costs at any time and not as a fund to be ring-fenced and protected for the future to pay for retirement.
"Although there is a clear need to balance everyday living costs with unexpected expenditure shocks, this can't be at the expense of women protecting themselves in old age," she said.