Men contributing more than women to pension savings

Over 90% of financial advisors report that men are contributing more to their pensions their women.

A survey carried out by Independent Trustee Company (ITC) reveals that almost 70% of respondents said men are saving ‘way more’ than females.

One of the most common reasons why women lag behind in pension savings is because they often take time out for the workforce to start and raise their families.

Almost 60% of the financial advisors surveyed said this was the main reason for the lower pensions among women.

Meanwhile, 40% highlighted the gender pay gap as a significant contributor to the disparity in savings.

“These breaks in employment result in lower earnings and fewer opportunities to contribute to pension plans,” said Glenn Gaughran, Head of Business Development at ITC.

“There is a myriad of factors at play here – for some, being at home with their children, particularly in the early years is important, and for many others, the lack of affordable and or available childcare means that women often have no real choice but to leave full-time positions or instead settle for part-time roles so as that they can look after their children.

“All of this culminates in a situation whereby women lose out on job promotions, salary rises, and pension contributions are stalled or stopped altogether,” he added.

When it comes to financial planning, over 30% of respondents said they believe men are taking a more proactive role, while 14% perceive men as being more inclined towards long-term planning.

Mr Gaughran outlined several practical financial steps that women can take to strengthen their financial security and plan for their future:

Establish Clear Financial Targets: Define specific short-term and long-term financial goals, such as creating an emergency fund, saving for retirement, or funding education. Setting clear and achievable goals is essential for creating a successful financial strategy.

Monitor Your Cash Flow: Keep track of your income and expenditures to see where your money is going. Understanding your cash flow will help you to make informed decisions about spending, saving, and investing.

Build a Safety Net: Work towards saving three months’ worth of salary in a savings account. Creating a rainy-day fund provides a buffer against periods of reduced income or unemployment.

Prioritise Debt Repayment: Concentrate on clearing high-interest debts, such as outstanding credit card balances, as quickly as possible. High-interest debts can quickly accumulate and become a significant financial burden. Consider options such as debt consolidation to streamline multiple debts into a single, more manageable payment.

Invest in Your Retirement: If you’re not already enrolled in a workplace retirement scheme or Personal Retirement Savings Account (PRSA), join now, it’s never too late. Explore opportunities to bolster your retirement savings such as through Additional Voluntary Contributions (AVCs) if feasible. Review any dormant retirement accounts from previous employments and adjust your contributions as needed.

Seek Professional Financial Guidance: Consult with a financial advisor. A knowledgeable advisor can offer tailored advice and assist in developing a comprehensive financial plan.