Active Chartered Financial Planners is warning Teesside women that their pensions may have been adversely impacted by the pandemic, and that they should take action now to avoid delaying their retirement.
A recent report by More2life and the Centre for Economics and Business Research found that women’s pensions have become, on average, £183,936 smaller compared to men’s, and that the gap between the size of men’s and women’s pensions has increased by almost £27,000 due to COVID 19.
This means that women will, on average, need to work an additional 14.5 years to save the same funds as their male counterparts by retirement age.
According to data from the Office for National Statistics, more women than men were furloughed under the government job retention scheme, and where their salaries have been reduced to 80 per cent, this has impacted the amount paid into “defined contribution” pensions.
Liza Pontone, a chartered financial planner with Active and an ambassador for insuring women’s futures with the Chartered Institute of Insurers (CII), said: “A gender gap has been present in pensions for a long time, due to women often assuming the role of carer in the family, and being penalised for assuming the role of the mother or ‘good daughter’ in addition to salaried work.
“Many of the industries adversely impacted by the pandemic were ones with a predominantly female workforce, including hospitality, administration and professional cleaning, meaning many women lost their jobs as well as being furloughed. This, in addition to having to reduce working hours for emotional labour, has hit female pension pots hard.
“It’s important that women look closely at how their salaries may have been impacted by COVID 19 and look at mitigating this to avoid delaying retirement and risking poverty in the future by accumulating their own pension provision.
“I recommend that all women, in particular those in their 40s, review their pension provision now. Should a shortfall exist, the aim must be to find a solution and investment strategy suitable for her age and profile. This would be reviewed and supported whilst she accumulates her pension and throughout retirement, when she finally needs it.”