Auto enrolment has revolutionised the UK’s saving landscape. But while more women than ever are saving into workplace pensions, women still end up with much less pension income than men – currently 40% less than men on average.
We know that women face extra challenges when saving for retirement. These challenges, which begin at the start of their working life and continue as they juggle conflicting priorities, have ripple effects in their later life and retirement.
Given the issues which can already impact the savings outcomes for women, we were keen to talk to our female members and understand how the Covid-19 pandemic has affected them so far.
The impact of Covid-19 on women’s pension savings
As lockdown began to ease in July 2020, we asked members in our online community forum about the impact of the Covid-19 crisis.
Among the members we surveyed in July 2020, about 17% of both men and women had been furloughed. But because women and men tend to work in different parts of the economy, their financial outlook has shifted in different ways.
Younger and lower-paid workers are more likely to work in the parts of the economy that were shut down to slow the spread of the virus. As the Coronavirus Job Retention Scheme is unwound, these workers may be more vulnerable to continuing reductions in work hours as well as job loss. These impacts are likely to disproportionately impact women’s long-term earning and savings outlook.
However, we did see some more positive trends. Some women in our forum expect the saving habits developed during lockdown to stick. They said the financial shock of the pandemic had made them realise they didn’t need to spend as much as they’d thought, and they’d gained some mental space to get their priorities in order.
Building back better – women’s perspective
Recovering from the pandemic gives us an opportunity to ‘build back better’ as governments and organisations around the world explore ways to improve people’s lives as economies begin to recover from the crisis.
Many of these conversations involve addressing climate change head on – something that resonates strongly with women who are members of Nest. Nearly two-thirds (64%) say they want climate change to be a priority in the economic recovery.
With Nest’s new climate change policy committing to the decarbonisation of our investment portfolio, this is something we fully support and believe can be used as an important tool to engage our members – particularly our female members – with their pension savings.
To find out more about the experience of women saving with Nest – read our full report