A YouGov survey of 1,000 women, commissioned by Zurich, has found that almost half of women aged 25 to 39 are not saving for retirement, leading to renewed concern about a potential pension crisis (1).
The survey looked at young women’s attitudes to saving and found 40 per cent of females aged 25 to 39 had nothing set aside for old age. This figure is 10% higher than for males, where 30% of men of the same age are not saving for retirement. When this figure is applied to the wider population it suggests that 2.5 million women are not saving for retirement (1). The figures are even more concerning amongst the self-employed, with just 12% of women and 17% of men paying into a scheme (2).
Further questions on the survey showed that 16% did not know their monthly pension contribution which was more than twice the number of men. The research also found 1/3 of women did not know how to save for retirement, compared with 1/5 of men (3).
Emma Huntington of Zurich commented “Far more women than men are saving nothing into a pension for retirement. If women are unable to start saving sooner, they may have reduced financial freedom in later life”.
Analysis by The Pensions Policy Institute reinforces the importance of saving for younger people. A 21- year-old who saves £50 a month to a pension could build a pot of £135,305 by the age 65. Delaying saving until they hit 31 means that £95 a month would be required to accrue the same pot by age 65 (3).
Automatic pension enrolment has certainly had a dramatic effort on the numbers of 22-29 year olds engaged in workplace pensions. The figure rose to 54 per cent in 2014, up from 35 per cent before 2012 (3).
Workers must be aged 22 and earning at least £10,000 a year to be automatically signed up for a workplace pension scheme. About 11m workers will be eligible for automatic enrolment, according to government estimates (1).
The value of pensions and investments and the income they produce can fall as well as rise. You may get back less than you invested.