That is over twice as much as the gender pay gap which, as of April 2018, stood at nearly 18%.
The report also found a lack of an official estimate of the gender pension gap which is a “significant barrier to promoting awareness of this issue and creating the conditions necessary to resolve it”.
Work life balance
“Women are the ones who have to take time out of the workplace to have children and a male wouldn’t typically have to do that”, explained Sarah Lord, partner at Mazars.
“Women tend to go back to work part-time having had a period out of work; and therefore, don’t have the same opportunities to save based on their earnings; and that could lead to a lower contribution towards their pensions.”
As a result, the average pension pot for a 65 year old woman is £35,800, which is one fifth compared to the average 65 year old man’s, research from Insuring Women’s Future shows. Similarly, over the last 10 years occupational pensions for men have risen 83% more per week with £42 for men and £23 for women.
“It is worrying that women face such a stark shortfall in their pensions compared to men, and this highlights why this group needs financial advice,” said Rachael Griffin, tax and financial planning expert at Quilter.
New options needed
Women face a harder retirement time than their male counterpart, since they have to survive with less money, which is why there is a push for financial advisers to target women with more relevant and tailored options for their future.
According to Lord, women “usually prioritise the security of their family first, rather than the security of their future”; while men tend to be riskier with their finances which, in the long run, has a greater pay off for them than it does for women.
That is why financial advisers need to reconsider the way they approach their current and future female clientele, Lord added.
Griffin said: “Our research shows that 40% of women aged 30-45 are the primary decision makers when it comes to the household finances, which makes the case for making advice more relatable to women.
“We recently launched the Financial Adviser School, and all of our students are taught how they need to market and speak differently to different demographics, including women.”
Lord too agrees there needs to be a shift in the way advisers talk and explain investment and investment options to women.
“[Financial advisers need to get] individuals to understand that retiring these days is not just about pensions; it’s not just a culture of pensions, it’s looking at finances in totality so other savings and other incomes.
“For some women who maybe are single and are approaching retirement, annuity might be appropriate. People in the industry are scared of annuity, but actually in some people’s circumstances an annuity could be the most appropriate thing because it gives security of income and it gives a known level of income.
“To women who are retiring my advice would be to make sure that their financial advisers are considering their finances in the totality rather than pensions in isolation and open their minds to all options available to them.”