Scottish Widows: Pension savings not on the radar for young women Go compare with our comparison table

Scottish Widows: Pension savings not on the radar for young women

20 October 2010 / by Rachael Stiles

An increasing number of young women are not paying any heed to saving for the future, an attitude which could leave them in pension poverty, warns Scottish Widows.

More and more young women are not giving a thought to saving for their retirement, according to the latest annual Scottish Widows Women and Pensions Report, with more than half of women under the age of 50 admitting that they are not preparing adequately for their financial future, an eight per cent rise on last year.

Scottish Widows warns that this attitude to pension savings could lead to "widespread poverty amongst future generations of women", and that the findings highlight the need for effective auto-enrolment for pensions.

Auto-enrolment would engage women in retirement planning from a young age, the pension provider suggests.

The report, based on a sample of more than 5,000 adults, also reveals a significant disparity between the attitudes of women and men when it comes to pension provision and long-term savings, with younger women saving less than half for their retirement than their male counterparts.

Women aged under 50 have, on average, are saving £49 per month, and have accrued £4,816.50, which is just over half of what young men have saved.

Older women are not doing much better than the younger generation, saving a third less than males over the age of 51; just half of older women are saving enough for retirement.

A third of young women who do not have a private pension said they have never thought seriously about saving into one, and more females than males perceive pensions as being 'risky', which Scottish Widows says can be rectified with better education about pensions.

Commenting on the report's findings, Ian Naismith, head of pensions market development at Scottish Widows, said they "paint a worrying picture" as savings habits can affect how people save as they get older.

"In previous years we have seen younger women becoming more financially independent, but as that group moves into their 30s it appears that those coming behind are not continuing the good work."

Mr Naismith said that women's attitudes towards pension savings need to be tackled, along with the disparity between men and women when it comes to preparing for retirement, to prevent more women facing pension poverty in the future.

"We should place special attention on younger women to ensure they have the best chance of decreasing their burgeoning retirement savings gap," he continued. "We believe that auto enrolment, coupled with better pension and long-term savings education, are the key elements to improving retirement provision in the UK."

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