As men in heterosexual relationships tend to be the older partner, typically by 2-5 years, women leaving the workforce at the same time can have a detrimental impact on both a women’s pension pot and a couple’s overall retirement savings.
According to PensionBee analysis of ONS data, which takes into account current pay gaps, men aged 64 typically accumulate £439,581 in pension savings, which is £139,451 more than women of that age’s average savings of £300,130, representing a gap of 32%.
However, if a couple with a two year age gap (a 62 year old woman and a 64 year old man) were to leave the workforce at the same time, the woman could face £176,815 less in retirement, leaving her with a pot size of £262,766. Meanwhile, a couple with a five year age gap (a 59 year old female and 64 year old male) could be £225,296 worse off, with a pot size of £214,285 in retirement, representing a difference of 51% compared to her older male partner.
Romi Savova, CEO of PensionBee, commented: “While coordinating retirement is a common goal for many, the persistent gender pension gap in the UK presents a significant barrier to achieving this, which is only exacerbated for couples of different ages.
This huge disparity in pension pot sizes for savers within a five year age range highlights the urgent need for policy interventions and bold action from employers so women can enjoy the same level of wealth in retirement as men.
It also proves once again that timing is everything with pensions, and ultimately the time at which an individual or couple choose to leave the workforce, and start withdrawing their pension, has a significant impact on their overall retirement income.”
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