"It’s clear that an urgent and common objective for all workplaces must be to better support women to improve their financial health."
Women have seen their savings plummet over the past three years, causing a widening gender savings gap, according to research by Close Brothers.
The overall average pension savings pot, including all workplace pension schemes (active and inactive), has increased from £89,000 in 2017 to £120,000 in 2020. Men have seen an increase of 35% and, whilst women have experienced a higher percentage increase of 38% over that time period, women’s retirement savings still lag significantly behind men’s at £73,000 compared to £162,000, savings parity remains a long way off.
7% of employees have no savings in pensions, a 13% fall since 2017; but again, the gender difference is stark at almost three times as many women as men having no pension (11% compared to 4%). In terms of sectors, those working in consumer goods and services are the most likely to have no savings in pension schemes, at 12%.
When asked about the value of their other savings and investments, excluding their primary property, the average saving pot of UK employees comes in at £31,000. This is actually a 3% fall on 2017’s £32,000 average pot, and the detail reveals a stark gender divergence. Men have seen their average saving pot rise 8%, from £36,000 to £39,000 in three years. However, in complete contrast, women have seen their savings plummet from a £26,000 average to just £22,000; a 15% fall, and almost half the value of their male counterparts.
The same pattern holds true in those with no savings or investments – just 7% of men have none, compared to 14% of women. Not only has this gap has widened over the past three years, things have improved for men and worsened for women; in 2017, 8% of men and 13% of women reported having no savings or investments.
Jeanette Makings, head of financial education at Close Brothers, said: “While it’s really good news to see the improving pensions landscape, no doubt spurred on by the effects of auto-enrolment and financial education, there is still a significant amount of work to be done to educate employees to balance their savings plans to ensure they can support their lifestyle now, for the future and for retirement. With the stark gender imbalance this is even more urgent for women.
“Understanding the financial health of employees and identifying the key employee groups and financial issues that need most attention is the first step in delivering a tailored financial wellbeing programme that will drive change. And this has never been as important as in the wake of this current crisis. However, from this research, it’s clear that an urgent and common objective for all workplaces must be to better support women to improve their financial health.”