The average pension pot of UK employees in large firms is now £120k, a 35% increase on three years ago, according to new Changing Trends of Financial Wellbeing research undertaken by Close Brothers. However, outside of pensions, average savings and investments have fallen 3%, and delving into the detail reveals a widening gender savings gap.
The overall average pension savings pot, including all workplace pension schemes, has increased from £89k in 2017 to £120 in 2020.
Men have seen an increase of 35%, and whilst women have experienced a higher percentage increase of 38% over that time period, women’s retirement savings still lag significantly behind men’s at £73k compared to £162k.
Figures from: Close Brothers Lifetime Savings Challenge 2017 and Changing Trends of Financial Wellbeing 2020
In the wake of the coronavirus crisis, Close Brothers found that 16% of workers are going to reduce the amount they save into their pensions, due to pressures on shorter term needs, despite the risk that this could affect their longer-term financial wellbeing. Female workers, however, are less likely to make this decision (12%) compared to nearly one in five (19%) of their male counterparts.
As well as more people having to draw on their savings during the coronavirus, there are some positives to have emerged when it comes to savings: 50% plan to make changes to their finances, with the top changes being to keep a closer eye on day to day spend and to put more into their rainy day fund.
All demographics have spent less in lockdown and all but 18-34 year olds have realised they can live happily on less, which bodes well for putting more aside into savings once the acute effects of the pandemic ease their finances.