Women are more likely to access their retirement savings earlier than men despite having savings half the size of men at a similar age, research by Phoenix Insights has found.
In a survey of 2,500 adults over 45 who are not yet retired, the think tank discovered four in 10 (40%) women over 45 plan to spend their retirement savings early to support their pre-retirement income, compared to three in 10 (32%) of men. This was despite 44% of women over 45 saying they currently have insufficient funds to support them through retirement.
The research highlighted that employed males by mid-life (aged 45-54) saved on average £146.1k (€168.8k, $177.2k) into their workplace pension, over double the average amount women saved.
The gender pension gap in private pensions is at 35%, the Department for Work and Pensions (DWP) estimates suggest.
Although pay disparity is a key factor, Phoenix Insights’ report, Caught in a Gap, concluded the life stages women go through – such as motherhood and menopause – disproportionally effect earnings and saving capabilities.
The director of Phoenix Insights, Catherine Foot, said: “As many as 18 million people in the UK are not adequately financially prepared for later life, and a disproportionate number of these are women.
“For meaningful progress in this area, we need to make saving more accessible, especially for those on low incomes and working part-time. Some women have been trapped in a cycle of being unable to pay into their pension either through a lack of affordability or because they are excluded entirely from workplace pension saving.
“We need polices that seek to improve the savings capacity of women across the different life stages, and encourage employers to go above and beyond the minimum levels of support.”
Phoenix Insights issued a number of recommendations to employers for women’s future finances including re-enrolling workers into pension schemes annually, rather than the statutory three years, ensure employer pension contributions continue during periods of parental leave and making flexible working the norm from day one and highlight this across all job roles.