Scottish Widows’ annual report reveals a heightened gender pensions gap.
By Maggie Mancini
Nearly two million single mothers in the United Kingdom will likely struggle to afford basic necessities in retirement, according to the annual Women & Retirement Report from Scottish Widows.
The study finds that 39% of all women in the U.K. are not on track for retirement based on their current saving habits compared to 32% of men. More than half (60%) of divorced women and 75% of single mothers are the most likely to not have even a minimum lifestyle in retirement.
The findings indicate a 39% gender gap in median annual net retirement income. The average woman is on track to receive £12,000 in annual income in today’s money after paying for housing expenses compared to £19,000 for men.
Women are also less likely to be on track for a private pension than men (59% compared to 71%). Nearly half (47%) have moved to part-time work to take care of children (compared to 15% of men), with 37% of women leaving the workforce entirely (compared to 18% of men).
Fortunately, younger generations—particularly women—have started to save for retirement at earlier ages. More than half (62%) of women say that they started to save for retirement by the age of 25, while 58% of men say they began to save for retirement by 25 years old.
Women—and particularly single mothers—are also more concerned about the cost of living and have cut back on essentials, with 79% of women concerned about the rising cost of living compared to 72% of men. Approximately 81% of single mothers and 83% of divorced women are concerned.
More than a quarter (31%) of single mothers and 32% of divorced women have cut back on essentials to deal with the crisis, as well as 24% of all women. This is compared to 18% of men.
“Despite how familiar we all are with the gender pension gap issue, the long-term impact on the day-to-day reality for women when they retire is less talked about,” says Jackie Leiper, managing director of Scottish Widows. “Understandably, single women affected by the motherhood penalty and the cost of solo parenting may be more focused on how to support their family today, but this report shows the struggle they could face by the time they become grandmothers.”
