"Women are not only earning less and therefore saving less, but are significantly less confident about the savings options available and how to choose what’s best for them."
The gender savings gap leaves over half of female workers feeling financially unprepared for retirement, according to research from Close Brothers and the Pensions and Lifetime Savings Association.
The research finds that 51% of female workers feel financially unprepared, compared to around a third (35%) of male workers.
Only 23% of female employees feel well prepared for retirement, compared to more than a third of men (36%).
When it comes to pension saving, the average amount in a woman’s workplace pension scheme is less than half that of their male colleagues (£53,000 vs £120,000). Worryingly, women are twice as likely to have less than £5,000 in workplace savings compared to their male counterparts (29% vs 15%).
Looking at non-workplace savings, the research shows that while around a third of male employees have less than £5k in savings, this rises to two in five (41%) amongst women. The findings also reveal that female employees are saving nearly a quarter less than men in non-pension savings (£221 vs £305 per month), a difference of over a thousand pounds a year.
This savings gap is perpetuated by a significant pay divide, with the mean annual salary of women surveyed being £27,379 compared to £37,655 for men, nearly 30% less. And this is key; 42% of female workers don’t think that they get enough salary and workplace benefits to save. This figure falls to 27% of men.
However, income is not the only relevant factor in savings activity. Financial confidence plays a significant role, with only a third (36%) of women feeling confident about choosing the right financial product compared to 45% of men.
Jeanette Makings, Head of Financial Education at Close Brothers, said: “The savings crisis is thrown into stark relief when looked at under the lens of gender imbalance. Women are not only earning less and therefore saving less, but are significantly less confident about the savings options available and how to choose what’s best for them. Women are more likely to trust friends and family or personal savings websites, which are unlikely to be able to provide suitable and comprehensive information across the entire savings landscape.
“Financial educators, like employers, are better placed to offer guidance and information, but they need to consider the diverse needs of their audience, including what style and content suits the individual members of their workplace. We work closely with employers to deliver effective education incorporating different savings techniques, goals, and needs.”