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\t\tWomen face greater risk of running out pension wealth\t<\/p>\n
Women are retiring with significantly less pension wealth than men, leaving them at greater risk of running out of wealth just seven years into retirement, new analysis has found.<\/p>\n
Gen X women, aged 55-59, have just \u00a381,000 in their pension on average, compared to the \u00a3156,000 held by men of the same age, leaving them vulnerable to pension poverty, according to illustrative calculations by investment platform Interactive Investor shared with City AM.<\/p>\n
Assuming the full state pension is claimed at age 67, women with a pot worth \u00a381,000 could run out of money after seven years, while men with \u00a3156,000 would see their pension last for 17 years, based on withdrawals of \u00a311,000 a year.<\/p>\n
The calculations follow the recent analysis published by the Department of Work and Pensions, showing that in 2020 to 2022 there was a 48 per cent pension gap on average between men and women aged 55-59, highlighting the \u201csystematic hurdles\u201d women face in growing pension wealth.<\/p>\n
Gender pay gap increasing risk <\/p>\n
Camilla Esmund, senior manager at Interactive Investor said, \u201cThe gender pension gap means that thousands of women risk having little to supplement the state pension.\u201d<\/p>\n
\u201cDespite having lower pension values, women live for longer on average in retirement, and are often left struggling financially in old age once their pension wealth has dwindled.\u201d<\/p>\n
Esmund acknowledged the \u201ckey role\u201d the pay gap creates for women in building pension wealth, adding women are more likely to work part-time or take time away from employment to care for loved ones, \u201cleading to a lifetime of lower contributions\u201d.<\/p>\n
Launch of Pension Committee <\/p>\n
The newly relaunched Pensions Committee pledged focus to addressing the gender pay gap, but Esmund stressed the importance of encouraging \u201cgreater pension engagement\u201d in the UK, with auto-enrolment in its current format not going far enough to help \u201cplug the gap\u201d.<\/p>\n
Esmund added: \u201cWe\u2019re even seeing younger women struggling to build pension savings despite having time on their side for real growth potential. There are a lot of factors at play here, but this also comes back to the sheer importance of greater pension engagement in the UK.\u201d<\/p>\n
\u201cWe need to help empower women to take control of their pension wealth at an earlier stage, but also to remind them it\u2019s not too late to make a difference if you\u2019ve spent time out of the workforce.\u201d<\/p>\n
A newly published report from the Work and Pensions Committee has also urged the government to commit a UK wide strategy for the ageing population in order to tackle pensioner poverty, including a strategy to increase take-up of Pension Credit.<\/p>\n
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