Young women need to save an average of £ 185,000 more than men for their retirement

Young women need to save an average of £ 185,000 more over the course of their working lives to receive the same retirement income as men, according to a new report.

Scottish Widows said women currently in their 20s would only have saved around £ 250,000 on average by the time they retire.

Men, who tend to have higher incomes than women and are less likely to take time off work to raise their families, will have on average almost £ 350,000 saved for their retirement. But women probably need more than this lack of savings, as they tend to live longer than men, and some may spend longer periods in need of care later in life, according to the report.

A 25-year-old man will live today to 86 based on current estimates, while a woman can expect to reach the age of 89, according to the Scottish Women and Retirement report Widows.

The £ 185,000 gap consists of around £ 100,000 to close the savings gap, an additional £ 50,000 to cover longer life expectancy and £ 35,000 to pay for additional care needs.

Scottish Widows calculated that women would need to save around an additional £ 210 per month from their mid-twenties until retirement to close the £ 185,000 gap.

However, this calculation was based on several assumptions, including that a pension pot would show an annual growth in real investment of 2% and that someone would start saving for retirement at age 25 and retire at age 68. .

Jackie Leiper, Managing Director, Workplace Savings at Scottish Widows, said: “It is well known that the gender pay gap has a negative impact on women’s retirement prospects. But even if we close the savings gap, pension equality would still not be achieved. Women need to fund a longer retirement and pay more for child care costs.

“There are ways to level the playing field – from improving maternity pensions to providing better parental leave and financial support for childcare – so that women are not more financially penalized for raising a family. Of course, we also need to tackle broader structural issues in our society, such as the gender pay gap.

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The report, which has been published annually since 2006, also found that the same proportion of men and women are now saving enough for a comfortable retirement (61%) for the first time on record.

People were deemed to save enough if the equivalent of at least 12 percent of their income went into their retirement fund.

In 2007, 54% of men were judged to be saving enough compared to 41% of women.

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The report used a range of numbers for its modeling, including income figures from the Office for National Statistics (ONS) and a survey of more than 5,000 people on retirement planning across the UK. United.

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