Women nearing retirement have half the savings of men

A committee of MPs has been told by a leading economist that women aged between 60 and 65 have on average less than half the pension pots of men of the same age.

Michael Johnson, research fellow at the Centre for Policy Studies, told the Treasury Select Committee that only 3.5 million women had defined contribution pensions – less than half the number of men and that their male counterpart had “more than double” the pension pot of the average female saver (£55,000).

Mr Johnson gave evidence of household savings alongside economists Ashwin Jumar of the Joseph Rowntree Foundation and Torsten Bell of the Resolution Foundation.

All three of the economists believe that the disparity in savings and pensions between various groups in society was significant.

People do not have enough pensions savings,” said Mr Jumar. “There are probably about a third of pensioners who are just doing well, but there are also probably about two thirds of people – owner-occupiers or renters – with low pensions.”

The panel also told the committee that Government incentives to help savers were only currently being used by those who were already in the upper percentiles of wealth.

“We need to ask ourselves the question why is it that approximately 70 per cent of the Treasury’s total investment in incentivising people to save goes to 15 per cent of the income distribution who are in least need of it,” Mr Johnson said.

The economists particularly recognised that young people had experienced 15 years of stagnant wages, and increased living costs, which may lead to many opting out of planned increases to contributions in auto-enrolment pensions over the next few years.