Young women in the UK are delaying paying into pensions and increasing their risk of ending up with an insufficient retirement income. As reports have shown, many young adults are not saving enough for their retirement, and missing out on the benefits of planning for their retirement early.
Pensions Minister Steve Webb has said that young people are waiting for ‘decades’ after starting work before they consider saving for their retirement.
Official figures from the ONS have revealed that the number of women (aged 22 to 29) in the UK who are enrolling for a workplace pension has fallen gradually for four years in a row – the sharpest drop of any age group.
In their Women and Pensions Report last year, Insurance giant Scottish Widows revealed that 54% of women in the 22 to 29 age group across UK don’t have any provision for pension.
Of the 45% women who according to the report believe they are saving adequately for their retirement, the average contribution towards pension is £182 per month. In contrast the men were reported to be saving £260 per month – a pensions ‘gender gap’ of £1000 in contributions each year.
Lynn Graves, head of business development at Scottish Widows said, “Overall, the growing gender gap in retirement savings means that women are facing an ever increasing shortfall when it comes to retiring and must act now to ensure they will not be exposed in later life."
More experts warn that saving for retirement has fallen off the priority list for UK’s 20-somethings as they face various other financial concerns.
"I am struggling to pay off debt and so at the moment every penny of my monthly salary is needed for rent, living and debt," says Kate Croxton, a 27-year-old charity worker from Sheffield.
Young adults in their early 30s consider saving to invest in property as a more relevant option than saving for a pension.
Pensions Minister Steve Webb says that he is concerned that the complex nature of pensions along with poor awareness about the pension system among young people is turning them away from planning for their retirement.
He said, "When young, they think they will live forever, and pension is something for their granny. There is a danger in thinking that your home will be your pension. None of us are expecting 20-somethings to become pension geeks, but what we do want is to demystify it, make it simple and ask the question - 'what sort of standard of living do you want when you are old'."