Interactive investor comments on ONS childbearing statistics, released this morning and the knock-on impact on pension saving.
Previously released government data on the gender pension gap reveals a widening gap between average pension wealth held by men and women, once women enter their 40s. The gender pensions gap is smallest for those aged 35-39 (10%) and then increases to 47% for those aged 45-49. The genders pensions gaps then decreases to 35% by the time women reach aged 55.
Alice Guy, Head of Pensions and Savings says: “Having children often has a huge knock-on impact on women’s pension wealth, with a pension gender gap opening up once women reach their late 30s and 40s. Women are more likely to work part time in their 30s and 40s and that makes it much harder to build pension wealth, and steep childcare fees mean there’s often little money spare for extra pension payments.
“It’s important to keep an eye on your pension wealth, even if you take time out from the workplace. If you’re planning to reduce your hours or take time out from the workplace, then it’s worth seeing if you can afford to make more than the minimum pension contributions while you’re still working full time.
“Another option, if you can afford it, is to continue to make pension payments as a non-earner. You’re allowed to pay up to £2,880 into your pension as a non-earner and still receive a tax-relief top up as if you were a taxpayer.”
“The good news is that the gender pension gap slightly reduces once women enter their 50s, suggesting that women often manage to boost their pension payments once they return to full time work. Pension saving is a marathon, not a sprint, and it’s possible, although not always easy, to channel more money into your pension once you can afford it.”
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