Women and pensions — is there a gender gap?

This article has been supplied by our channel sponsor, Pension Quality Mark.

Recent research by My Pension Expert has found that, on average, women’s pension pots are 27% smaller than the male equivalent. Women also own only 17% of all funds — some women have no pension pots at all because they have chosen not to work. Women are more likely to have career breaks to bring up children, work part time or have lower-paid employment.

Is this gap truly attributable to gender — or is it a purely mathematical one? The factors that most heavily influence the size of a person’s pension pot are how much is paid in and for how long. Investment performance and charges have their part to play, but the level and duration of contributions have the biggest effect.

The Pension Quality Mark recognises this, and accordingly we have set a minimum contribution standard for schemes wishing to apply for the Pension Quality Mark (PQM). We require contributions of a minimum of 10% of pensionable pay, with at least 6% coming from the employer. We also have a higher award, the PQM PLUS, where contributions are a minimum of 15% of pensionable pay with at least 10% coming from the employer.

These contribution standards are considerably higher than the current automatic enrolment minimum, and members who are saving into a scheme that has been awarded the PQM or PQM PLUS can be confident that they are building towards a secure retirement, regardless of whether they are male or female.