The report explored gender differences in retirement planning and the impact of the pandemic on financial confidence in later life.
It found nearly half of working women aged 55-plus are anxious about running out of money in retirement, highlighting the need for better engagement to improve financial prospects.
The debate discussed a range of factors impacting the gender gap in retirement savings, with panellists including:
David Burrowes, chair of the Equity Release Council and chair of the debate
Will Hale, chief executive officer of Key
Rt Hon Caroline Nokes MP, chair of the Women and Equalities Select Committee
Rt Hon Stephen Timms MP, chair of the Work & Pensions Select Committee
Dr Yvonne Braun, director of policy, long term savings and protection, Association of British Insurers (ABI)
David Burrowes of the Equity Release Council comments: “It is vital that we explore solutions to best support women to save more in the run-up to retirement and to think proactively and holistically about all options available.”
Key’s FY 2020 data shows 26% of equity release clients are single women compared to 14% of single men, highlighting the importance of property wealth as a source of later life funds for single women.
While the majority of its customers are married couples, the Council says it is vital that women play an equal role when discussing their retirement options and make joint decisions given their longer average life expectancies.
Despite women having lower retirement savings on average, they are also less likely than men to consider later life lending products as an alternative source of retirement income (23% vs 31%).
In a first step towards encouraging a more holistic approach to retirement planning, Rt Hon Stephen Timms MP confirmed the Work and Pensions Select Committee inquiry into pension freedoms would look at advice and guidance to ensure all assets are considered, including property wealth.
Will Hale of Key adds: “There is a huge opportunity in this market to engage women. Our client base is diverse, so the advice provision needs to reflect that. There are not enough female advisers in the industry, and we need to address these imbalances by accelerating the focus on recruiting and training more female advisers.”
Policies to help close the gender retirement gap in the future
Panellists highlighted key policy measures to help close the gender retirement gap in the future, including the potential to evolve auto-enrolment.
Dr Yvonne Braun of the ABI explains: “Three-quarters of part-time workers are women, which means many are therefore locked out of auto-enrolment. Contributions for pensions should be counted from the first pound people earn.”
Panellists also emphasised the importance of creating well-paid jobs and getting women in particular back into the workforce.
Rt Hon Caroline Nokes MP, says: “We need to do more to foster greater confidence for women in the workplace and in talking about money more broadly, all of which will contribute to greater levels of retirement savings in the future.”
The impact of Covid and what needs to be done here and now
Panellists also warned of the negative impact the pandemic has had on women when it comes to retirement. This comes as government figures reveal the annual average pensioner income for single women has increased by just 2% over the last five years, compared to an 11% increase for single men.
As a result, the gender retirement income gap has more than doubled from £1,560 a year in 2014/15 to £3,276 in 2019/202.
Hale comments: “Initiatives like auto-enrolment and addressing the gender pay gap will help in the long-term, but those approaching retirement will not reap these benefits. They need help in the immediate term to navigate their way to achieving a comfortable retirement.”
Rt Hon Stephen Timms MP says: “People need to have sufficient advice on their retirement funding choices, and a Pension Wise appointment should become the norm.”
Rt Hon Caroline Nokes MP adds: “Raising families is a joint enterprise and Covid has thrust many into hard fiscal choices about who should work and who should provide care for children or relatives. This shouldn’t be the case in 2021 so we need to talk more about shared savings.”