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Half of women in the UK admit to ignoring their pension, putting themselves at risk of pension poverty

  • New research launched by VitalityInvest has revealed half (49%) of women say they have made any additional payments into their pensions beyond auto-enrolment, leaving them at risk of pension poverty in later life 
  • Conversely, men were found to be far more likely to prioritise saving for later life (26%), with double the number of men than women having calculated what additional savings they will need to make for retirement  
  • However, almost two thirds (62%) of women found to have made lifestyle changes to increase their life expectancy and improve health in later life –paradoxically, increasing their need for more savings 
Research from VitalityInvest has revealed women are at a far higher risk of pension poverty than men, with only 19% having ever made increased contributions to their pension or retirement fund beyond auto-enrolment – and half (49%) having never made any additional payments.  

In a poll of 2,000 UK adults by YouGov, men were shown to be more likely to prioritise later-life wealth, with over a quarter (26%) having made extra or increased contributions to their pension or retirement savings plan. In fact, double the number of men (10%) have actively implemented positive changes to their retirement savings plan after calculating their later life finances compared to women (5%). 

Whilst the research reveals men to be more focused on their later life finances than women, shockingly three quarters (74%) of UK adults have either never made any contribution to their pension beyond auto enrolment (47%) or do not have a pension or retirement savings plan (27%). With minimum pension contributions now set at 8% through auto-enrolment, should someone just contribute this between the age of 20 to 65, this would not be enough to fund retirement from the age of 65. 

Later life health found to be a big priority for women 

Encouragingly, almost two thirds (62%) of women were found to have made lifestyle changes as a conscious effort to improve their health in later life, consequently giving them a better chance of a longer retirement to do the things they want, such as looking after the grandchildren or going on holidays. Triggers for making these changes include a health scare or a health scare of someone close (14%), advice from a health professional (10%), and hitting a big age milestone (10%). Paradoxically, this also increases their chances of living longer, and highlighting the need for more women to be saving for retirement. 

Mind the education gap 

Reasons for consumer’s failure to save for retirement can be tracked back to an education gap in the UK around pensions.  

When asked what would help incentivise them to save earlier, 36% of Millennials (those aged 25-34) stated that they want a better understanding of the government’s long-term plans for the retirement age and 31% want clearer advice from the Government on how to save for retirement. A quarter (22%) also think better financial education at school would also encourage them to save earlier for later life.  

When it comes to seeking advice on how much to save, the research found that Millennials look to official channels, such as the government or education system for encouragement. Meanwhile, Gen Z’s1 were found to be keener to take counsel from their friends than any other age bracket (15%). 

What gets us over the saving start line? 

VitalityInvest also polled 500 Independent Financial Advisers (IFAs) in the UK to find out what is triggering people to save more towards their retirement. Advisers said the top reasons people decided to start saving for retirement was hitting a big milestone (51%). The power of a simple conversation was also found to be a big trigger, with conversations with friends (31%) and conversations with a partner (30%) indexing highly.

Hillary Banks, Director at VitalityInvest, said: “It’s important we plan for retirement, whether that’s putting in place the right financial planning or the health to enjoy spending more time doing the things we enjoy in later life. It’s no secret that women’s pension pots are smaller than men’s. Women take time out to raise children which can pause payments into their pension pots for several years and this together with the gender pay gap, means their overall payments into their pots are less than their male counterparts. We know women live longer than men, meaning this is really concerning to see. 

“At VitalityInvest we have taken the time to bring together a financial solution that rewards customers for healthy decisions AND for saving. We waive our fees for our savings ISA customers if they are being active – a unique model which will benefit women and men who are looking after their health both now and in the future.

“The industry needs to do more to incentivise people to start saving more and earlier to help close the gender pension gap.”