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Women face serious obstacles to adequate pension saving

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New research from the Pensions Management Institute (PMI) reveals the majority of women are concerned that maternity leave will affect their pension savings. The research found there is a strong perception that breaks in employment, arising principally from raising children, will have a significantly detrimental impact on their pension savings. The results of the survey support the findings of recent DWP research that showed women reach age 55 with a third less saved into private pensions than men.

Commenting on the findings, PMI President Sara Cook said:  “This survey exposes the concerns of many women about their retirement prospects. Women continue to believe they will be penalised through their role as mothers, and far too many are concerned about facing a bleak retirement as a consequence of raising children.”

PMI’s survey records that 61% of working women have taken a career break, almost all these women having taken maternity leave, with 49% having been away from work for less than a year and 20% being absent for between one and five years. As a result, 54% of women polled worry about the impact of career breaks on their retirement.

The research also shows four in ten (41%) women are concerned about the impact that breaks in employment will have on pension accrual. Most employed women will be dependent on their pension savings to fund their retirement as 60% have no other retirement savings. Just 36% of working women know how much they have saved in their pension and the average pension savings for those women who do know how much they have saved is £23,959. Only 4% of female employees have saved more than £55,000 in pension savings.

Sara Cook added: “The survey is clear that many women are very worried about how to combine the roles of motherhood and employee without suffering significantly in retirement. Nearly half of those surveyed believed that better childcare support would enable them to return to work – giving them an opportunity both to be more productive and to make better preparation for life when employment has ended.

“In Scandinavian countries, women do not suffer any loss of earnings as a consequence of maternity leave. It is disappointing that in 2023 women are still concerned about what they might have to sacrifice to bring up a family.  If the root of the gender pensions gap is due to career breaks for women to bring up children, then at a societal level, the gender bias and widely held presumption that women should have the primary child-raising role needs to be addressed. This bias needs to be challenged so that both men and women have equal opportunity to care for their children without penalty.”

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