Raise the kids or raise your pension? Women hit by increasing pension gap from their 30s

Mark James

by , Content & Communications Manager

31 Aug 2016 /  

Aug 2016

Raise the kids or raise your pension? Women hit by increasing pension gap from their 30s
  • Women over 45 have pension pots 22% smaller than that of their male equivalents
  • Both genders are fairly equal until the age of 35 where a savings gap accelerates
  • The data supports recent IFS research, and suggests that the impact of raising children could be reducing savings
  • PensionBee suggests that financial companies aren’t doing enough to support female savers
  • Fawcett Society states that gap leaves women facing ‘risk of poverty and economic dependence’ in retirement

As their life progresses women’s retirement savings take a drastic hit, according to data collected by PensionBee.

The online pension manager analysed the amounts within 1,473 pension pots and discovered a big disparity dependent on age - women over 45 carrying 22% less in their pension than men in the same age group.

In contrast, pension pots are fairly equal amongst men and women in their early 30s. It’s only when women reach their mid-thirties that a growing gap begins to appear, with men between 36 - 40 boasting a pension 14% larger than that of their female counterparts. From the ages of 41 - 45 the gap grows even greater, the average man’s pot 16% bigger than a woman’s. As the graph below indicates, the impact of this disparity can be great, with women over the age of 45 carrying around £6,000 less in their pots:

Pension gap graph

The PensionBee findings follow recent IFS research that points to a gender pay gap, with the disparity between women’s and men’s earnings rising to over 30% ten years after a woman has her first child. According to ONS research the average woman has her first child at the age of 28.5 years, and it’s after this age that the PensionBee data reveals a growing pensions gap.

The findings give yet more weight to the claims of an economic gap between men and women, affecting not just take-home pay but retirement saving too, potentially leaving female pensioners with a far poorer quality of life than their male counterparts in the long term.

Given the pensions divergence begins in the 30s, it seems that having a child is what hits women’s pension pots hardest. This adds to the impossible dilemma that many women face, as taking time off work to have a child impacts not only their present earning potential but also their future income and quality of life.

Romi Savova, CEO of PensionBee, is calling for greater awareness of the inequality facing female savers - not just from their own employers and the government, but also from the wider pension industry. Speaking on the data she commented:

“Our data paints a worrying picture for female savers. Closing the pay gap will take time, making it all the more important for us women to take control of our pension savings now. The pension industry has left many women isolated from finance and we’re determined to change that at PensionBee. Better saving should be simple and accessible for everyone.”

Upon seeing the data Jemima Olchawski, Head of Policy and Insight at the Fawcett Society, added:

“Right across their lives women earn less and so have less to save for their pensions. What’s more, whilst auto-enrolment has been an important step forward, women are still more likely to be excluded from the benefits.

All this leaves women at risk of poverty and economic dependence in their retirement. It’s time to speed up the pace of change, close the gender pay gap and banish the dated stereotypes that mean women continue to be most likely to pay the price of care.”

Data notes

  • Data has been compiled from September 2015 - August 2016

  • The pension pot referred to in the graph is for a single pension pot. The average female recorded 2.6 pension pots and the average male recorded 2.8 pension pots on the PensionBee platform

For the full research findings, please contact:

Jasper Martens or Mark James
020 3859 5788
[email protected]


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Mobile PensionBee analytics chart
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