"We looked at data from over four million workplace members and found that every industry in the UK has a significant gender pensions gap."
On average, women’s pensions are half the size of men’s (£12,000 versus £26,000). Considering women are likely to live four years longer than men, this issue deepens as they need to have saved around five to seven per cent more at retirement age.
The study by Legal & General found the gender pensions gap exists regardless of average pay across different sectors, and ranges from a gap of 59% in the healthcare industry, to 13% in courier services.
The healthcare (59%), construction (51%), real estate/property development (48%), pharmaceutical (46%), aerospace, defence and government services (46%), and senior care (45%) sectors were found to have the largest gender pensions gaps. Of these six sectors, three are key industries for female employment – healthcare, pharmaceuticals, and senior care.
There are many reasons for the gender pensions gap, ranging from women holding fewer senior positions and being paid less, resulting in lower pensions contributions, to the fact they are more likely to take career breaks due to caring responsibilities. Of those that have taken a career break, 38% did not know the financial impact it had on their pension contributions.
Another potential driver is a significant gender confidence gap when it comes to managing pension pots. More than a quarter (28%) of women said they had confidence in their ability to make decisions about their pension, compared to almost half (48%) of men. This lack of confidence extends further to other financial decisions, with women less likely than men to feel confident managing their investments (22% of women versus 41% of men), and their savings (56% of women versus 67% of men).
Katharine Photiou, commercial director of Workplace Savings at Legal & General, said: “We looked at data from over four million workplace members and found that every industry in the UK has a significant gender pensions gap. This is a serious issue in itself, but it deepens when life expectancy is taken into consideration too.
“We’ve all heard about the gender pay gap, but very few discuss the gender pensions gap, despite the fact so many women experience it. This shows more needs to be done to boost engagement with pensions, particularly with those who feel less confident, and who may need help on where to start when it comes to making financial decisions.
“Millions of people would benefit from a wider range of support services to make more informed decisions about their savings and investments. But this support needs to be personalised to achieve any real shift, and this is where government and industry need to work together. Pensions can seem complicated but they're just a regular savings plan with some tax perks. We need to demystify pensions and get back to basics.”
Rita Butler-Jones, co-head of defined contribution at Legal & General, added: “It is striking that some of the sectors where we see the highest gender pensions gaps - such as senior care, healthcare and pharmaceuticals – are also among the top sectors for female employment. This demonstrates the extent of the crisis facing many women as they approach retirement, even in careers where they make up the majority of the workforce.
“There is therefore a real need for providers, schemes and government to work together to understand and tackle both the sector-specific and structural barriers which women face in saving for their future.”