The pension deficit or gap is the difference between the retirement income you have and what you need to maintain their standard of living in retirement.
In recent years, there has been growing concern about the pension deficit faced by women. Despite progress in gender equality, women are still facing significant challenges when it comes to retirement savings and are more likely to retire with less money than men. This can have a major impact on their quality of life in retirement.
There are several reasons why women face a pension deficit:
Another factor contributing to the pension deficit is the gender investment gap. Women tend to be more risk-averse when it comes to investing, which can lead to lower returns on their investments. This can mean that their pension pots grow more slowly than those of men, even if they are contributing the same amount.
There are also systemic issues that contribute to the pension deficit. For example, the state pension age for women has been increasing, which means that women are having to work longer before they can claim their state pension. This can be particularly challenging for women who are caring for relatives or who have health issues that make it difficult to continue working.
Addressing the deficit
The gender pension gap is a complex problem, and there is no single solution and government measures may be needed.
One key solution is to address the gender pay gap. This could involve introducing measures to ensure that women are paid fairly for their work, as well as providing more support for women who take career breaks to care for children or relatives.
Another solution is to provide more support for women when it comes to investing. This could involve providing education and training on investment strategies and encouraging more women to take on leadership roles in the financial sector.
Finally, there is a need for systemic change to ensure that the pension system is fair and equitable for all. This could involve introducing measures to ensure that women have access to workplace pension schemes, as well as providing more support for women who are caring for elderly relatives or who have health issues that make it difficult to continue working.
What can women do?
There are a number of things that you can do to help close the gender pension gap. Here are a few tips:
By taking these steps, you can help to close the gender pension gap and ensure that you have a comfortable retirement.
The value of investments and any income from them can fall as well as rise and you may not get back the original amount invested.
HM Revenue and Customs practice and the law relating to taxation are complex and subject to individual circumstances and changes which cannot be foreseen.
Approved by The Openwork Partnership on 26/04/2023
2mtrust is part of The Openwork Partnership. This blog was written exclusively for Partner Firms of The Openwork Partnership - sourced via Smart Hub