Frontier Economics have supported the publication with analysis of savings and retirement data and their implications.
The report found that the average woman in her 20’s could face a £185,000 gender gap in retirement. Factors contributing to this were varied with the most notable being:
- Structural inequalities in working life are a key driver of the gap: the gender pay gap, lower savings rates, career breaks and more part-time work mean that the average woman might be on track to save £100,000 less than the average man.
- While entering retirement with fewer assets, the average woman would in fact need more retirement savings than a man. This is because women can expect to live longer: an additional 3 years in retirement means that savings have to stretch further. To prepare for this, women would have to save nearly £50,000 more than men.
- Women are also likely to need more care in later life, which could mean an additional £35,000 in care costs for those who need residential care.
It would not be easy for women to close this gap. To ensure a similar quality of life in retirement, women would have to save a significantly higher share of their already lower income than men do.
The issues described are wide-ranging and require a broad suite of policy reforms. The report discusses these in more detail: some immediate reform could help by raising retirement savings in general (such as changes to automatic enrolment); while deeper structural reform is needed to address the gender gap (e.g. around parental leave and childcare).
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