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.
To discover more about the impact of lower pension provision on women watch this video produced by the Chartered Insurance Institute as part of its Insuring Women’s Futures programme.
