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A new analysis by PensionBee finds regional variation in the gender pension gap, with Northern Ireland having a 57% gap.
The UK gender pension gap can be as high as 57%, depending on savers’ age and regional location, according to new research from PensionBee.
The research is based on an analysis of the data of over 65,000 British consumers. PensionBee says that, on average, UK men have saved £24,236 towards their retirement compared to just £15,006 saved by UK women – a 38% gap in the size of their respective pension pots.
Savers in Northern Ireland have the largest gap at 57%, with average retirement savings for men totalling £17,883 versus £7,737 for women in the region. Analysis shows that the North East (£20,514 compared to £11,177) and South West (£24,641 compared to £13,326) have identical gaps of 46%, slightly higher than the national average (38%).
On the opposite end of the scale, savers living in Greater London have the lowest gender pension gap of 28% (£24,853 compared to £17,863).
The analysis also shows that the gender pay gap widens with age. There is a 46% gap amongst savers aged 50 and over (£52,592 compared to £28,249), more than double the 18% gap of savers under 30 (£3,925 compared to £3,215) and the 21% gap of those in their 30’s (£12,075 compared to £9,537).
PensionBee says this shows that, as a woman moves closer to retirement she has significantly less savings than a man of a similar age, and may face a less certain financial future. It says a woman in her 50’s will also have less time to reduce the gap than a woman in a younger age bracket. As a result, she may have to work longer than anticipated or may become reliant on the State Pension, which pays just £9,339.20 a year (from the age of 66 in 2021/22), to make up for the shortfall.
PensionBee also calculated the expected retirement pot of each age group, based on certain assumptions. The findings showed that those who are the closest to retirement, and have the most pressing financial needs, are expected to retire on significantly smaller pensions than their younger counterparts.
On average, savers aged 50 and over look set to retire on the smallest personal pensions of £87,500. This is over a third less than those aged under 30, who are expected to amass pots worth £140,700, on average, by the time they reach the age of 65.
The findings only relate to defined contribution pensions and many older savers continue to have access to defined benefit company pensions.
Romi Savova, CEO of PensionBee, said: “Everyone deserves to look forward to a happy retirement, regardless of their gender, and more must be done to prevent the gap from developing at the start of a woman’s working life, as we know that it only widens with age. Where a pay gap exists for women, a pension gap will follow, therefore tackling wage inequality is of paramount importance.
“At the same time, female savers must be encouraged to keep paying into their pension, even when taking breaks from paid employment or working reduced hours. Women are more likely than men to take time off work to look after children, and many women stop contributing to their pension while on maternity leave. The combination of lower salaries and long career gaps, with little or no pension saving for years, are a massive disadvantage for women.”