Could our daughters close the growing gender pension gap?
The gender pension gap is growing. Could our digital-savvy daughters close it, asks Scottish Widows pensions expert Jill Henderson
This marks the 21st year of the and I’m lucky enough to have been part of this incredible business since I too was 21. It’s an age of freedom and autonomy and that’s exactly the feeling I’d love for more people as they plan their financial futures.
The challenges women face are persistent, ranging from balancing careers with family responsibilities, to taking career breaks, pausing pension contributions and prioritising having emergency cash savings. These choices are sometimes made out of necessity, and sometimes because women just don’t have the support or tools they need.
My daughter started her first part time job in the summer, and I am keen that she and others avoid my mistakes of poor financial planning. In my teens, being connected to money was a ceramic piggy bank and paper booklet. My 16-year-old does everything in app, in real time, and can already budget in a way I failed to do with my first credit card!
Our data tells us that more young women are showing an appetite for digital first guidance. With fewer assets and less need for formal financial advice, this is a generation ready to take control of their financial futures if we can provide them with the right tools and support.
Over the past two decades we have seen some progress through automatic enrolment and more inclusive industry conversations around financial wellbeing. However this year we saw the gender pension gap open to 32 per cent, so more practical support is still needed.
Budget tweaks
The way people access their pensions was untouched in last week’s Budget, good news! However, for those adding to their pots via salary exchange, some big changes were announced. They won’t kick in until 2029, to give employers time to manage the changes, but the changes will cap the amount of contributions free from national insurance at £2,000. The good news is that there is still plenty of time to make use of the perk, plus tax relief on contributions will still exist exactly as it currently does.
Pension parity
Many of us just don’t realise the precarious ground women walk on in preparation for retirement.
Just 24 per cent of women are on track for a comfortable retirement, compared to 36 per cent of men, due to life moments and the choices we make around caring, working patterns and the biggie, career breaks! Half of women will take a career break, compared to just one in five men. This had a huge impact on my own retirement savings as I had no way to measure the impact. This shouldn’t be something that only women are angry about, there is a lot of work to be done to achieve parity.
Quote of the week
A woman’s best protection is a little money of her own
Clare Boothe Luce
Wildcard recommendation
I recently spent the weekend in London with my daughter and finally saw the musical Hamilton. My knowledge of the production beforehand was pretty sparse however – what an evening! The modern approach of song through rap and the juxtaposition of the historical 1770s setting was really impactful. The set, costumes and incredible seamless transition between scenes was superb. The audience was engrossed with many super fans showing their appreciation by singing every lyric. It will take me a while to get to that level but it’s a musical that will stay with me, I would highly recommend it!