According to research by Scottish Widows, the average woman will have £100,000 less in their pension pot when it comes to retirement age than the average man. Maternity leave, career breaks and the gender gap in salaries are all contributors, and now new evidence suggests that the global pandemic has helped widen the gap as women have been shown to be at increased risk of losing their jobs or quitting work to bear the brunt of childcare during lockdown.
This gap is extended to private pensions, particularly those of self-employed women who fall outside the governments net to improve workplace pension savings. Fewer than half of self-employed women with a private pension have adequate savings and research by pension provider Fidelity has found that 71 per cent of self-employed women had no pension savings at all. When interviewed, three-quarters of those women revealed that the reason was due to a lack of funds.
As if the situation wasn’t already bad enough, budget day revealed that 200,000 women have been receiving less state pension than they are entitled to, resulting in payouts that average £13,500 each. This is the direct result of poor record-keeping at the Department for Work and Pensions which failed to highlight women who qualified for enhanced pensions under the old state pension system. This has affected women whose husbands claimed their pension before 2008. Sadly the enquiry by the DWP will take some time to reach a conclusion as civil servants wade through several hundred thousand cases. Most of the women affected have no idea that they have been short-changed, and for some, the reimbursement will have come too late.
This is a further blow to retired women who have already protested against the increase to the women’s state pension age from 60 to 66. This alone left thousands of women with a gap in their savings, often left with no other solution than to claim state benefits.
But for self-employed women who are looking to rectify this situation and start saving into a private pension, there are new and exciting methods available with providers like Penfold offering an easy to use alternative to a more traditional pension, specifically designed for self-employed people.