Women need better financial education so they can save for retirement with a pension plan that will cover their later life expenses.
The calls from after pensions consultancy Barnett Waddingham says women are lagging behind men on workplace pensions.
Its latest study shows 37 percent of women don’t have a workplace pension, compared to 32 percent of men.
Barnett Waddingham says this leaves more women at risk of being financially underprepared for retirement and having to rely on a state pension alone.
Women need better finance education
Women are also significantly less likely to have made changes to their workplace pension investment strategy; 85 percent of women saying that they haven’t, compared to 10 percent fewer men.
The findings are reinforced by earlier research which shows the pensions gap widens substantially when people are older. 38 percent of women over 55 will only have a state pension to rely on. However, 83 percent of men over 55 will have more than just a state pension.
Commenting on the research Amanda Latham from Barnett Waddingham said: “There’s still a big proportion of women that are at risk of walking into retirement with insufficient funds, and less than their male counterparts.”
She called on employers and policymakers to offer better default strategies, saying the onus shouldn’t fall on individuals.
“The existing framework is letting too many women down, when it is in the interests of wider society for people to be well prepared for retirement.”
Pension scams
Meanwhile, the call for education around pension schemes rang elsewhere. This is as new measures to protect people who are saving for their pensions came into force this week.
The Minister for Pensions Guy Opperman said: “We are tackling the scourge of pension scams in practical terms to safeguard pensioners’ hard-earned savings.”
It comes after a number of scams where fraudsters offered “too good to be true” incentives. These include free pension reviews, early access to pension cash, or other time-limited offers.
Targets were then tricked into transferring their savings into a scam scheme – and defrauded out of their savings.
This does mean, however, that pensioners will not be able to make transfers without some interventions from pension trustees and scheme managers.
Red Flags
Trustees and scheme managers will be able to prevent a transfer request by giving it a “red flag” if fraud is suspected.
They might also be able to post an “amber flag”. This will pause a transfer until the pensioner can prove they have taken guidance from the Money and Pensions Service (MaPS).
The Government says it’s working closely with regulators, the Pension Scams Industry Group (PSIG) and enforcement agencies. It wants to protect pensioners and raise awareness of the dangers presented by unscrupulous fraudsters.
Jonathan Watts-Lay, a financial wellbeing and retirement specialist, said the regulations were an important defence against scammers but said education around the issue was still needed.
He said: “It is important to know and understand the risks, such as, if someone is giving up a guaranteed income, losing a protected retirement age or incurring penalties on certain investment types.”
Mr Watts-Lay called on employers to offer their staff financial education and guidance including workshops, digital tools and helplines.
Adding: “This can not only help their employees to spot scam warning signs, but can also help them to make an informed decision before entering into a pension transfer.”
Feyaza Khan has been a journalist for more than 20 years in print and broadcast. Her special interests include neurodiversity in the workplace, tech, diversity, trauma and wellbeing.
