• Women are living longer than men, yet paying 50% less into their pension funds each year
• Both men and women are only contributing between 4 and 6 per cent of their annual earnings into a pension
As shares plummet and pension funds take a hit, Fairinvestment.co.uk looks into pension trends in the UK.
In a survey conducted for Fairinvestment.co.uk *, results showed that the average amount Brits pay into a pension
each month is £64, a total of just over 4% of the average monthly wage, which the survey showed to be £1,485 (£17,820 annually).
However, the recommended rule of thumb when it comes to pension contributions is half the age a person is when they first start contributing**. A 4% contribution would mean that, adhering to these rules, the contributor was just eight years old when they began to pay into their pension fund, which is highly unlikely!
According to Fairinvestment.co.uk's results, both men and women are failing to pay in anywhere near the recommended percentage. The results show that women contribute £14 less than the average, contributing £50 each month into a pension. This equates to 4% of the average woman's salary as found by the research to be £16,339.
Men pay slightly more into their pension each month according to the study. An average of £100 is paid into a man's pension each month, which equates to around 6% of the average annual salary for a man, which the survey found to be £21,766.
Commenting on the results, Fairinvestment.co.uk's chartered financial planner, Sharon Bratley said: "The results suggest that future pensioners are going to struggle to survive on their pension annuities
, as between 4 and 6 per cent of earnings is not a sufficient pension contribution.
"Of course, it does depend how old someone is when they first start contributing as to what percentage of their salary they should be paying in. The problem we are facing though is that life expectancy is on the rise, and without adequate pension contributions, Brits are going to find themselves struggling to survive financially during retirement."
The issue of life expectancy is particularly poignant when it comes to women. According to the Office for National Statistics, if the mortality rate remains the same as it was between 2004-2006, a 65 year old woman can expect to live for a further 19.7 years, compared to a man of the same age's 16.9 years.
Commenting, Mrs Bratley added: "Women particularly, need to start taking their pension seriously. It is harder for women to save a significant amount as career breaks for children are common, which means they should save as much as they can, when they can. Statistics show that women are expected to live longer, therefore, in theory women should be saving more than men, not less."
Due to the fact that women earn just three quarters of what men earn on average, it would be fair to predict that their pension contribution would also be around 25 per cent less, but the survey results show that women actually pay even less than that, contributing just half of a man's average contribution.
"As women become increasingly independent, there has never been a better time for women to take control of their pensions and contribute appropriately," said Mrs Bratley. "I would recommend seeking pension advice
if you are concerned that your contributions will not be sufficient," she concluded.
*Survey conducted by OnePoll for Fairinvestment.co.uk with 2,511 respondents
**As seen on moneysavingexpert.com