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At the current rate of progress, it will take another 20 years to close the gender pensions gap, according to a new report by Scottish Widows.
The company’s women and retirement report 2024 also says that the gender pensions gap will only close in 20 years if the government implements further policies encouraging women to save into a pension.
These policies include:
• Getting more women saving into a pension and qualifying for the full State Pension.
• Increasing the confidence women have to invest and manage their finance.
• A shift in approach to joint financial planning so that women do not lose out when annuities are purchased or in the event of divorce.
The report did highlight that “good progress in reducing the gender pensions gap over the last 20 years” has been made.
The gender pensions gap has reduced from 52% to 33% since 2008 for those aged 50-64, but women currently nearing retirement are still likely to have pension pots that are a third smaller than men.
Scottish Widows also predicts that, at the current rate, two million women in the UK feel like they will never be able to retire.
In order to make further positive changes, Scottish Widows’ workplace savings specialist Susan Hope believes collaboration is needed between regulation, the industry and employers.
With regard to auto-enrolment, she said it has been “great”, but 43% of women do not feel confident enough to manage their own pension.
Additionally, issues remain that predominantly impact women. If a single mother works two jobs part-time and earns under £10,000 per job, she will not be eligible for auto-enrolment and miss out on a pension.
Scottish Widows’ head of pensions policy Pete Glancy said: “Within the pensions system, reforms to auto-enrolment could allow those working part-time, or juggling multiple jobs, to benefit from pension contributions, including contributions from their employer where they themselves are unable to save at that point in time.”
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