It’s no secret that there is financial gender gap between men and women.
From wages to pensions, men tend to have more in their pay packets and in the bank.
But now a new study from VitalityInvest has suggested there is also a significant gender difference when it comes to thinking about the long-term with saving.
It found that men are much more likely to prioritise being comfortable in their old age, with more than a quarter (26%) having made extra or increased contributions to a pension or retirement savings plan.
Around one in ten (10%) opted to crank up how much they are saving after calculating what their finances would look like in later life given what they are currently putting away.
The same, however, can’t be said about women.
Health before wealth
By contrast, fewer than one in five women (19%) have ever decided to make an increased contribution to their pension beyond the minimum required as part of the auto-enrolment scheme.
This is particularly notable given women are likely to be making lifestyle changes in order to improve their health in later life, and therefore live longer.
Around two thirds (62%) of women polled have done just that, whether because of a health scare (14%), advice from a health professional (10%) or hitting a significant age milestone (10%).
Of course the problem with living longer is that you need a bigger pension pot in order to cover your living costs, making the decision of so many women to just stick with paying in the minimum even more costly.
Just as making lifestyle changes to improve your health is a good idea, so too is ensuring that you have saved enough for your retirement.
It seems that as women get older, they aren’t realising this, though in truth it’s not like men are likely saving enough for their later years either, even with larger numbers going beyond the minimum necessary.
Hillary Banks, director at VitalityInvest, said: “It’s no secret that women’s pension pots are smaller than men’s.
“Women take time out to raise children which can pause payments into their pension pots for several years and this together with the gender pay gap, means their overall payments into their pots are less than their male counterparts.
“We know women live longer than men, meaning this is really concerning to see.”
Why aren’t we saving more?
Vitality reckons that the reason people aren’t that fond of the idea of saving for retirement comes down to an education gap.
It noted that more than a third of the people polled aged 25-34 (36%) want a better understanding of the government’s long-term plans for the retirement age, while around one in three (31%) want clearer advice from the government on how to save for later life.
Around a quarter (22%) believe that better financial education at school would help them to save earlier for their later years.
Every penny counts
Sandra Forbes, 49, from West London is a prime example of how easily this happens.
After she was made redundant two years ago, she changed careers – combining four days a week as an office administrator with eight hours of work a week as a sports massage therapist.
Having suffered a significant pay reduction following her redundancy, she now hopes that the money she saved in her younger years, combined with the redundancy package, will last her into retirement.
But she also said that any contributions she could make now “are so small that they will make no real difference” to her pension pot once she retires.
However, it’s important to remember that every bit of spare money that you put into your pension will make a difference.
As it is invested and reinvested over time, what might seem like a small sum can grow into a substantial stack of money.
When it comes to your pension, every penny really does count.
Sticking to the minimum
The auto enrolment scheme has certainly made a big difference to the way that we save for retirement.
The initiative forces bosses to open a pension for employees who meet certain conditions, and then pay into that pension, alongside the employee.
And the minimum amounts everyone has to pay in has steadily been increased.
Just this year for example the minimum for employees rose from 3% of their monthly gross salary to 5%, while the contribution from bosses has also risen from 2% to 3%.
While this will make a noticeable difference to the amount you take home every month, the truth is that it may still not be enough for you to enjoy a comfortable retirement.
Fidelity for example reckons that savers need to put away 13% of their gross annual salary EVERY YEAR between the ages of 25 and 68 to ensure they have enough cash to cover their retirement
So while putting away the minimum is a good start, it would be a mistake to assume that that will be enough for a retirement free of money worries.