Automatic enrolment has gone a long way to helping workers prepare for retirement. Government figures show that 9 million employees are now enrolled in a workplace scheme, and both employer and employee contributions are on the rise – but it may not be enough to help women, many of whom are still lagging behind when it comes to saving for retirement.
That's according to the online pension planning tool Pension Monster, whose research discovered that only 32% of those using the tool are women, suggesting that men are far more engaged with their pensions. Alongside that, women's pension pots are less than half that of men's, standing at an average of £70,000 and £192,000 respectively, so this lack of engagement could have long-term consequences.
However, much of it could be to do with a lack of support, too. While part-time jobs and career breaks no doubt contribute to this pension shortfall, so does a lack of guidance, with the figures going on to reveal that women who have access to professional advice have an average pot size of around £125,000 – far higher than those who are unadvised.
"Despite the initial success of auto-enrolment, efforts to maintain this level of engagement are necessary," said Peter Bradshaw, national accounts director at Pension Monster. "Women in particular will benefit from early and ongoing planning and guidance. Considering women will likely take career breaks for child care, and the fact life expectancy for women has reached 83 years old, they have the most to benefit from [such support]."
It seems that guidance really is key when it comes to being prepared for retirement, but so is starting early. Auto-enrolment should be making it easier to start saving, and with the minimum contribution level soon increasing, more workers should be building a healthy pot for retirement.
But if you're not yet enrolled, or you want to do more to boost your chances of having a secure retirement income, what can you do? The key is simply to start saving! You may want to increase your contributions into your workplace pension, or perhaps you want to invest separately in an ISA – or even the new Lifetime ISA if you're serious about saving for retirement.
If you're approaching the time when you need to think about turning your pension savings into an income, contact our annuity advice service for a no-obligation chat
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