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Pension gap
Important information - the value of investments can go down as well as up, so you may get back less than you invest. Tax treatment depends on individual circumstances and all tax rules may change in the future. Withdrawals from a pension product will not normally be possible until you reach age 55 (57 from 2028). This information is not a personal recommendation for any particular investment. If you are unsure about the suitability of an investment you should speak to one of Fidelity's advisers or an authorised financial adviser of your choice.
Emma-Lou Montgomery, Associate Director, Personal Investing
Know what you're up against
Not surprisingly, lower wages throughout a woman’s lifetime are having a big affect on women’s pensions. And as private pensions depend on your earnings, it follows that you’ll be saving less. This isn’t helped by the state pension provision competing for being one of the lowest in Europe1.
Research shows that the UK’s gender pension gap – the percentage difference in pension income for female pensioners compared to male pensioners – was 37.9% in 2019-202.
Proposed changes to childcare provision in the Spring Budget by chancellor Jeremy Hunt may well help to keep more women working. But even in later life, women are more likely to work part-time or retire early to look after elderly relatives - or because they’re suffering from restrictive menopausal symptoms.
Divorce can also help women lose out later in life - with women neglecting to think about pensions when it comes to their settlement arrangements.
Sources:
1. Pension Times - June 2023
2. Prospect: Achieving gender equality in pensions
Take control
The current state of affairs paints a pretty bleak picture. But forewarned is forearmed. Here are some things you can do now to help close the gap.
- Pay your pension some attention now. Open a Self-Invested Personal Pension - if you don’t already have one - with as little as £20 per month (the government tops this up by £5).
- Add 1% if you can to any contributions you’re making to a pension right now. It’ll make a big difference in the long run.
- Take advantage of any additional company contributions on offer to your employee pension.
- If you've collected a few pensions over the years, you might like to understand more about the pros and cons of bringing your pensions together.
- And if you’re thinking of divorcing your partner, remember to factor in both your pensions when discussing your settlement package.
Important information - It’s important to understand that pension transfers are a complex area and may not be suitable for everyone. Before going ahead with a pension transfer, we strongly recommend that you undertake a full comparison of the benefits, charges and features offered. To find out what else you should consider before transferring, please read our transfer factsheet. If you are in any doubt whether or not a pension transfer is suitable for your circumstances we strongly recommend that you seek advice from one of Fidelity’s advisers or an authorised financial adviser of your choice.
What you could do next
Start looking after future you, today
Take control of your retirement savings and get your money working harder with the Fidelity SIPP.
Make the most of your pension allowances
Find out how to make the most of the tax-efficient pension allowances with our handy guides.
Set your retirement goals
Get an indication of the annual income you need in retirement to help you work out how much to save.
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Please remember that past performance is not necessarily a guide to future performance, the performance of investments is not guaranteed, and the value of your investments can go down as well as up, so you may get back less than you invest. When investments have particular tax features, these will depend on your personal circumstances and tax rules may change in the future. This website does not contain any personal recommendations for a particular course of action, service or product. You should regularly review your investment objectives and choices and, if you are unsure whether an investment is suitable for you, you should contact an authorised financial adviser. Before opening an account, please read the ‘Doing Business with Fidelity’ document which incorporates our client terms. Prior to investing into a fund, please read the relevant key information document which contains important information about the fund.
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