UK women are being ‘left behind’ in the retirement industry and will end up paying the price out of their pension pot if they don’t take action, experts warn
Women in the UK are being left behind by the retirement industry, with “significant gaps” in their education and understanding of pensions when compared to men. This then translates to gender differences in pension savings and ultimately sees women retiring with less than men despite living longer on average.
Get Britain Pension Ready campaign has revealed new data showing the extent of this issue, with just 8% of women saying they understand pension terminology. Compared to 21% of men.
The research surveyed 2,000 adults in the UK this year and found nearly a third of women, 29%, admit they have “no understanding at all” about pension terminology.
This is more than double the amount of men admitting their lack of knowledge. Crucially, 27% of women said they’d never heard of drawdowns.
Which is one of the most common methods of accessing your pension in retirement. Essentially, it allows you to take some of your retirement savings either in regular payments or as a lump-sum and keeps the rest of your savings invested.
But it does also involve some risks because you’ll need to try to balance how much you take out with how much your investments can earn so you don’t run out of money. A further 24% had also never heard of SIPPs, a personal pension you can manage yourself.
It usually has a wider selection of investments you can choose from than other pension types and if you’re not sure what to go for you can let your provider or financial adviser choose for you. Without knowing about these vital aspects of retirement money and pension management, women may be missing out and not even realising it.
As pension poverty rates continue to rise, this could leave thousands unaware and unsupported. The knowledge gap isn’t just costing women money, it’s also taking a mental toll as one in four felt so ashamed of how little they know they didn’t seek advice or didn’t know what questions to ask if they did get help.
Sarah Lloyd, Commercial Director at Annuity Ready, says: “This data shows that the UK’s pension knowledge crisis is not just about age; it’s about access and education. Women are clearly being left behind, and we’re also seeing whole regions struggling to get the information they need to plan for retirement.”
Some regional insights in the data showed the East Midlands is also struggling with 28% admitting they know nothing about pensions, compared to just 9% of people in Wales.
People in the West Midlands reported the highest levels of confidence with 25% believing they know a great deal about pensions with London coming in second at 23%.
It’s not always just about confidence though. Earlier research showed Gen Z believes they know a lot about pension products and how they work, but often lacked real understanding.
To help combat the information gap in retirement money, the Get Britain Pension Ready campaign offers a range of free insights and advice, urging people to educate themselves to avoid pension pitfalls. This includes a quiz to see where your knowledge gaps are and a checklist to follow if you’re only starting to plan for retirement now.