Let's call time on the #Genderpensiongap

Meet Serena: Since Covid my hours have been cut to part time.

She’s expecting her first baby and is having to go part time due to COVID-19. This means starting life as a first-time-parent making half her usual wage. She currently contributes 4%, which is matched by her employer, which makes her one of the 41% of women who are saving, but way off the 12% deemed adequate. Career breaks and part time working to manage child care can have an impact on pensions savings. Learn more about motherhood and pensions and why we’re calling time on the #GenderPensionGap in our latest Women and Retirement Report.

Meet Fiona: I haven’t been paying into a pension at the moment. I’ve just been focusing on making ends meet.

Fiona is a self-employed writer and creative workshop co-ordinator. In an industry highly impacted by COVID-19, she’s in a vulnerable position. In fact 70% of arts and culture workers have been furloughed. Lockdown has impacted her and her musician husband’s livelihoods. They’ve had to focus on the short-term need to get back on their feet instead of their dream retirement plans. Read more about the effects of COVID-19 on women’s finances and how we propose calling time on the #GenderPensionGap in our latest Women and Retirement Report.

Meet Dee: I’m trying to figure out how to get a pension being self-employed.

Dee is trying to figure out how to get a pension as a self-employed entertainer. Understanding what and where she should save is a bit of a mystery to her at the moment and she isn’t alone in feeling this way. In fact, more women than ever are self-employed. 41% of self-employed women are saving nothing at all for retirement, compared to 27% of self-employed men and 13% of employed women. Scottish Widows would like to see the automatic enrolment mechanism extended to support self-employed people and call time on the #GenderPensionGap.

Find out more in our latest Women and Retirement Report.

Jackie Leiper's pension tips for women

Top 5 pension tips:

1. Find out what you have got, talk to your employer or check your pension statement. You can trace old pensions at www.gov.uk.
2. Check if you are eligible to join your employer pension scheme. It’s a great way to build up savings with your employer paying in on your behalf too. If you are self–employed watch our top tips webinar.
3. For many women short term stability is the priority just now but if you can, try to keep paying into your pension, even if it’s the minimum for now, so your employer keeps paying too. It soon adds up.
4. Decisions like reducing hours or stopping working can leave you with less savings at retirement. If your income drops over time your partner may be able to pay into a pension for you to keep the finances balanced.
5. Claim child benefit – check if you are eligible on the government website. Going through the application process keeps your National Insurance contributions up to date, which you’ll need to claim the full state pension at retirement age.

2. Working part time – Read Charlotte's story

For 10 years I worked full time as a teacher. One of the benefits was paying into the Teachers Pension Scheme every month. I never really thought about retirement, my pension payments just went out of my monthly wages.

When we had our first little girl, I took a year of maternity leave, so payments into my pension were greatly reduced. Once I stopped receiving maternity pay from work, and was on Statutory Maternity Pay, they stopped altogether. Paying into my pension and my private ISA had to be put on hold, and I had to use some of my savings to cover expenses whilst I was on maternity leave.

At the end of the year I returned to full-time work and began paying back into my Teachers Pension. Knowing that I was going to be having our second daughter soon, I also tried to save as much as I could into my ISA. When I went on my second maternity leave, once again I couldn’t afford to continue paying into my pension or ISA for 12 months.

I had already decided that I didn’t want to go back to full-time work, but the part time option I was offered was neither practical nor economical. So I decided to leave my full-time job and join a Supply Agency, working 3 – 4 days a week. Handing in my notice was the scariest decision I had made, but I haven’t looked back.

With my current job I don’t have the option to contribute to my Teachers Pension. Instead I’m enrolled into a pension scheme and I pay a small amount each month. It’s much less than when I was working full-time, but at least it’s something! I still can’t really afford to save into an ISA, as I have pretty much cut my salary in half. But I get to be at home with our girls four days a week, so that is much more important.

Thinking about the future, I honestly don’t know what will happen at retirement. We will have to manage with what we have, which won’t be much! It is scary when I think about it, and I wish I had thought about it earlier. Hopefully in the future I will be able to start to save more again.

If Charlotte’s story resonates with you, you might be interested in watching our short Pension Basics films. We also have lots of really great hints and tips on our hub page, just close Charlotte’s story to see more.

3. Self-employed - Read Davina’s story

Saving for my retirement isn't something I thought about when venturing into the world of employment. I was more concerned about paying back my student loan and sorting out my deposit for my mortgage.

Once they were sorted, I did start paying into a private pension. But shortly after, I became pregnant with my first child and stopped payments.

When the government brought in automatic enrolment, I thought ‘Brilliant – no need to actually put much thought into it!’ But when I had my second daughter, I decided I wanted to work for myself.

As self-employed, I now had to start thinking about pensions myself. My husband pays a fairly large percentage into his work pension and he has a good pension scheme. But should I just be relying on my husband's pension for my retirement? No, of course not!

I did my research and decided to transfer all of my workplace pot into private pension. When it came to deciding how much to pay in each month, I didn't use any future calculation plans. I just decided on a sum that fits in with my monthly budget. I like it because it's flexible and I can stop and start my payments at any time and also increase or decrease the amount.

I’m optimistic about retirement. Having switched from an employer to self-employed, I’ve also had to change my retirement plans. Alongside a pension, it's also important to invest in other assets such as property. Having worked our way up the housing ladder, I see my house as a valuable asset that will hopefully allow us to live comfortably in the future.

If Davina’s story resonates with you, you might be interested in watching our short Pension Basics films. We have lots of useful tools and calculators on our website to help you work out how much to save each month. Our hub page also has some really great hints and tips to help with your retirement planning, just close Davina’s story to see more.

5. The impact of life events - Read Donna’s story

I’ve worked for a large high street retailer for 27 years – since I was 18. I had a non-contributory final salary company pension scheme through work until the company closed that scheme and replaced it with a workplace pension.

When we got married, my husband and I were on a similar wage and in a similar position. After the birth of my first child, I stepped down from my management role and took a pay cut. Then 18 months later, after the birth of my second child, I stepped down further and also cut my hours. When we separated after 9 years of marriage, my husband’s salary had increased to almost 8 times mine.

In 2016, whilst I was on an unpaid career break, my husband left our family home. He had been in charge of our finances – and at this point I realised what a mistake that had been. In the aftermath of a separation, I had to take charge of my finances. When the family home was sold, I used the equity from the sale along with every penny I had to buy a house and set up a new life for me and my children. There I was, at the most stressful and emotional time of my life, having a crash course in financial education.

But I still didn’t think about my pension. I was firefighting day to day, and still am. I have returned to work after my career break, but after managing the issues that can come with divorce, like legal costs and proceedings, I have no savings. And I am not entitled to claim any of my husband’s pension. When I was with my husband, I had planned to take an early retirement at 55, once our mortgage was paid off. But life can change so fast, and plans change along with it. Splitting and having to set up a new life means I may not be able to retire until long after I’m 65.

If Donna’s story resonates with you, you might be interested in watching our short Pension Basics film about divorce. We have lots of really great hints and tips on our hub page to help you, just close Donna’s story to see more. You might want to visit the Pensions Advisory Service website for more information too.

1. Career Breaks and Maternity leave - Read Kate’s story

I started my career as a primary school teacher and loved my job. Part of the attraction of teaching was the knowledge that I’d be able to pay into a pension scheme. So I happily signed up to that as soon as possible.

Some years later I fell pregnant with my son, when I was working part time. I wanted to take the full year of maternity leave to spend as much time with him as possible. I felt the best way to be able to do that, financially, was to opt out of the pension scheme. I was twenty-seven at the time, and I was opting out temporarily, as I fully intended to go back at the end of the year.

As often happens, 12 months flew by and I decided that I wanted to stay at home a little longer with my child. So instead of going back, I handed my notice in. Four years have passed and now I worry about how big an impact this has had on my finances for the future.

At thirty-one, in a part time job (not teaching) that doesn’t have a pension scheme, with no savings and not much leeway to start any, I’m currently unable to even consider a private pension.

At the moment I’m thinking about my next steps. Whilst I’m reluctant to go back to teaching, I feel that it will be the best financial decision I could make.

I think about the future in a different way now. Unlike when I was in my twenties, I understand, now, that the years fly by in the flash of an eye. Before I know it, I’ll only be fifteen, ten, five years away from an age where I might like to retire… but have nothing to do it with.

If Kate’s story resonates with you, you might be interested in watching our short Pension Basics film about working part time. We also have lots of really great hints and tips on our hub page, just close Kate’s story to see more.

4. Consider your pay - Read Nikola’s story

My name’s Nikola, I’m 48 and I’m currently a full-time carer to my two lovely kids, who have conditions which prevent them from attending school. This means I’m their mum, their nurse and their teacher all rolled into one. I get a government Carer’s Allowance, which I’m very grateful for - don’t get me wrong - but which does little to ease my situation.

Although I started working at 16, I couldn’t start contributing to my Local Authority pension scheme until I was 18, I worked for that company for almost 24 years, and in the last 5 of which I had to drastically reduce my hours to care for my family. In the end my other responsibilities meant I took redundancy which seriously impacted my ability to save for the future.

In addition to my Carer’s Allowance, I also teach online now and then, but my family’s needs must come first for me - and this has left me with greatly reduced earning power.

Like everyone, I’m worried about my family’s financial future, as our children will probably be dependent on us for an extended period. I don’t feel there is much pension information around for people like me and I’m not sure where to start. At the moment, I have no idea how to save for retirement in my current situation.

While I do try to save what I can each month for my kids’ future, I’d love to be better informed.

I think there are many carers like me who have stopped working or drastically reduced their hours and our financial future needs more support than most. I just want to have the opportunity to save for the future like everyone else.

If Nikola’s story resonates with you, you might be interested in watching our short Pension Basics films or visit the Government website for more information. We also have lots of really great hints and tips on our hub page, just close Nikola’s story to see more.

Women & Retirement Research

More women than ever before are saving for retirement – and on average they’re saving more too. Our 2019 Women & Retirement Report celebrates 15 years of progress and highlights why in real terms there’s still a big gap between men and women’s savings so an ambitious set of reforms are needed to tackle the challenges women continue to face. Every year we host an event and invite industry leaders, media and employers to join us to discuss the on-going problems women face when saving for their future.

Read our full report and press releases:

• Women & Retirement research report (Full report)
• Women saving for retirement hits record high despite £78K gender (Press release)
• One in three female entrepreneus saving nothing for retirement (Press release)

International Women’s Day 2020

To celebrate International Women Day we are raising awareness of the gender pension gap at the 10th Women of the World festival in London, festival goers discuss what’s in their mind when it comes to pensions savings and have their questions answered. Join the conversation and find out more @scottishwidows #GenderPensionsGap.

Work in the community

We’ve made public commitments on gender, including being the first FTSE 100 organisation to commit to increase the proportion of senior management roles held by women to 40% by 2020.

As well as working with our own Scottish Widows’ customers we also provide financial education to the wider community. Volunteers from across the organisation host sessions in schools, teaching children how to manage their money.

We’ve also partnered with Edinburgh University. As part of a programme called Students as Change Agents, we support students with research projects focused around the gender pension’s gap.

Policy

Summary of policy recommendations

Source: Women & Retirement research report

Women of the World Festival

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Women and Retirement

Our industry leading Women and Retirement report celebrates 15 years of research into Women’s pensions savings. Each year we’re joined by industry leaders, employers and experts to shape policy, make recommendations and campaign for change to make it easier for women to save for the future.

Taking on your Future Tour

Each year our experts tour the UK answering thousands of pension questions. Look out for us again this September 2020.