Although women in their 20s are saving more for their retirement than ever, men could benefit on average from an additional £78,000 in their pension pot at retirement.

That is the conclusion of the 15th annual Scottish Widows Women and Retirement Report which shows that, as a result of the gender pay gap, men are able to save more money overall than women.

Several groups of women, in particular, are under-prepared for retirement. These include lower-middle female earners working in supermarkets, call centres, nurseries and care homes.

As such, just 47 per cent of women earning between £10,000 and £20,000 are saving enough for retirement, compared to 65 per cent of those earning £40,000 or more.

More than a third (37 per cent) feel that their only option is to opt out of their pension scheme in order to manage cash flow. As a result, they lose out on valuable employer contributions and tax relief.

Women in this lower‐middle earner group often face competing demands on their income such as paying for childcare or saving for a property, with seven in 10 likely to face financial difficulties. 

Life milestones such as having a family or buying a first home, which should be positive steps, can also cause financial stress and hinder the ability to save. Pension contributions stop after 39 weeks on maternity leave, and those who are trying to juggle work with childcare commitments often work part‐time – 75 per cent of these workers are women.  

When it comes to housing, women face a much greater affordability challenge than men, driven primarily by differences in income. Average house prices across England are 12 times the median salary of women, compared to eight times that of men; median rents in England consume 43 per cent of an average woman’s income, compared to 28 per cent for men.  

All of these challenges are compounded by the issue of disengagement: four in 10 women (42 per cent) are unclear about how much they are actually saving for retirement; while more than half (55 per cent) have doubts that they are putting aside enough money.  

Iain Birrell, of Thompsons Solicitors, commented: "While we must be a bit cautious about a pension company saying that women need to make more pension provision, especially since their solution appears to be more financial services, the basic point is important. The report itself notes that the situation is improving, but it is hard to address decades of under-provision quickly. Women remain less likely to save, and save less when they do. There are often hard-wired, systemic reasons for these which are particular to the position which women have in the labour market.

"The report notes that this problem is particularly acute for self-employed women. A lot more needs to change before this can be properly addressed, but at least this report is a contribution to awareness of the problem."

To read the report in full, go to: