Gender pension gap – 5 positive ways to help you narrow the difference

July 2023
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Spectators will be cheering for the England women’s football team as they play in the 2023 Women’s World Cup, taking place in Australia and New Zealand from 20 July to 20 August.

Women’s professional football has started to become popular for the mainstream in recent years. The Lionesses winning the Euro 2022 at Wembley Stadium gave the sport and women footballers a big boost. 

But there’s still a massive disparity in the pay that professional female footballers are rewarded compared to their male counterparts.

For example, according to WalesOnline (1), England right-back Lucy Bronze makes an estimated £200,000 a year from club football. Meanwhile, Gareth Bale was reported to have been paid £600,000 a week when he was playing for Real Madrid.

While this is an extreme example of gender disparity, it does highlight the problem of the gender pay gap, and the knock-on effect this can have on women’s pensions.

Women’s private pension pots are worth around 35% less than those of men

In June 2023, a government report (2) revealed that, by the time they reach 55, women’s private pension pots are worth around 35% less than those of men.
So, on average, for every £100 accumulated in men’s private pensions, women have just £65. As a result, many women could end up missing out on thousands of pounds of retirement income.

As well as ongoing salary differences, another primary reason that this shortfall often occurs, according to a report from Pension Management Institute in MoneyWeek (3), is that many women take time out of their career to raise a family.

What may be more troublingly is that less than half (36%) of women know what their retirement savings are worth. And only 4% of female employees have more than £55,000 in their pension pot.

With all this in mind, you may be worried about a potential gap in your pension savings. So, here are five positive ways to help make up some of the shortfall.

1. Make sure you’re signed up to your workplace pension 

If you're over 22 and earn more than £10,000 a year, make sure you're signed up to your workplace pension scheme.

You have to pay 5% of your salary into your pension, but your employer is also required to contribute 3%. 

Talk to your employer to find out if they will increase or match the amount you’re contributing. If your employer is willing to match your contributions, you’re effectively doubling your money, which could give your pension pot a significant boost and help to provide a better standard of living in retirement.

If you’re not a member of your workplace scheme, you’re essentially turning down free money and missing out on valuable retirement savings. 

Opting out of an employer’s scheme is rarely advisable. The amount of money you save into the plan is often less than half the combined value you’ll receive from employer contributions and tax relief. This is especially true if you’re a higher- or additional-rate taxpayer.

2. Increase your contributions

One of the benefits of using a pension to save for retirement is the tax relief. 

When you contribute to your pension, some of the money that would have been paid to the government in tax goes into your pension instead. 

If you're a basic-rate taxpayer tax relief, you’ll pay just £80 for every £100 contributed towards your pension (2023/24). Higher-rate and additional-rate taxpayers will pay £60 or £55 respectively. However, if you’re a higher- or additional-rate taxpayer, it’s important to remember to claim the additional relief through self-assessment.

Thanks to tax relief, increasing your contributions as much as possible could offer a significant boost to your pension savings, which could help to provide more income in retirement.
Remember, pension contributions are limited by your Annual Allowance. In the 2023/24 tax year, you can save up to £60,000 or 100% of your annual earnings, whichever is lower.

3. Find lost pensions

If you've changed jobs regularly, you may have lost track of pensions as your career has progressed. Tracking down your lost pensions could help to increase your retirement pot.

According to PensionsAge (4), an estimated £37 billion, belonging to 1.6 million UK savers, is sitting in  lost or dormant pension accounts.

If one or more of these lost pensions belong to you, tracking them down could be time well spent. A financial planner can help you with this. 

Even if you haven’t mislaid a pension, if you have multiple different plans, it may be useful to consider consolidating them into one easy to manage pension scheme. This could help you save on fees and may help boost potential growth, too.

4. Use “carry forward”

If you have a lump sum, such as an inheritance, you may want to consider using carry forward to boost your pension pot. 

This allows you to use any unspent allowance from the previous three years, which might mean you could contribute up to £140,000 in 2023/24 and still receive valuable tax relief.

5. Speak to a financial planner

Retirement is likely to be one of the biggest lifestyle changes you'll ever face. Whatever stage of life you're at, it's never too late to start planning for the next chapter of your life.

We will provide you with the information and support you need to confidently make the important decisions necessary. 

Financial security in retirement may be one of your most pressing concerns. The good news is that working with a professional financial planner can help give you peace of mind, allowing you to focus on your future with confidence.

Get in touch

If you’re concerned about a potential pension shortfall or simply want reassurance that you’re on track to be able to afford the retirement you hope for, please get in touch. 

Email or call us on 0800 055 6585.

Please note
The information contained in this article is based on the opinion of Aspira and does not constitute financial advice or a recommendation to any investment or retirement strategy. 
This article is for information only. Please do not act based on anything you might read in this article. All contents are based on our understanding of HMRC legislation, which is subject to change.
The value of your investment can go down as well as up and you may not get back the full amount you invested. Past performance is not a reliable indicator of future performance. Levels, bases of and reliefs from taxation may be subject to change and their value depends on the individual circumstances of the investor.
Workplace pensions are regulated by The Pension Regulator.
The figures and information in this article are based on current tax legislation (as of April 2023) and may be subject to change.






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