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Women over 50 to retire with pension half the size of men’s, says Legal & General

The pension of women aged over 50 is half the size of men’s, according to research by Legal & General PLC (LON:LGEN).

It’s due to the gender pay gap and unpaid caring work, while the generation of people approaching retirement has not had time to benefit from auto-enrollment in work pension.

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As a result, women have around £43,000 in private pots and men have around £82,000, the Daily Mail reported.

A quarter of women over 50 have less than £5,000 in their pension pot, compared with only 15% of men.

People with a full National Insurance record could receive £9,300 a year in state pension at the current rate and those with less money can apply for pension credit.

Outside of pension funds, women aged over 50 have £29,000 cash savings on average, compared to £40,000 for men.

“We know there are a multitude of factors that influence these figures, from the gender pay gap to the increased likelihood of women working part-time or taking career breaks when compared to their male colleagues,” Andrew Kail, chief executive of Legal & General Retail Retirement, was reported as saying.

“We also know that the pandemic has likely increased this disparity due to the unpaid caring responsibilities that typically fall to women.”

“We need to do more to address this financial inequality but also to address the root causes that influence it, specifically the significant burdens our society places on women outside of their careers.”

The gender pension gap has widened during the pandemic.

The Financial Conduct Authority found that out of those who were paying into a pension in February, men were more likely to have cut their contributions: 12% compared with 9% of women.

However, 7% of women have stopped contributions altogether, compared with 5% of men.

“Not everyone’s pensions have been hit by the pandemic, but men are more likely to have emerged unscathed. Nearly one in five men have increased pension contributions during the pandemic compared with one in ten women,” said Sarah Coles, personal finance analyst at Hargreaves Lansdown.

“There will be some people for whom cutting pension contributions is the sensible alternative to missing paying bills or debts. However, if you have any room in your budget, it’s worth continuing to make payments, so you can keep hold of the extra top ups you get from your employer and the taxman.”

“If you’ve been forced to cut or stop your contributions, it doesn’t have to be the end of the world, as long as you get back on track as soon as you can. As soon as your finances are on a firmer footing, boost your payments again. Because while a couple of missed months is neither here nor there, the longer it goes on for, the more damage you are doing to your retirement prospects.”

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