I WAS eating in a restaurant lately, and the next table were a little girl about three and her older brother, a little boy about five. We shall call them Janet and John.
Janet became distracted, and looked away from the table for a moment, and John did what any self-respecting little boy would do: reached across the table and stole a couple of her chips.
But Janet spotted him – no dozer, this one - and complained to mum, who for the sake of a quiet life made him hand over some of his chips in return (proving that crime doesn’t pay).
Then Janet, drawing up to her full height and drawing on the collected wisdom of all her three years, told her brother smugly: “If ya don’t ask, ya don’t git none.” Laugh? I nearly choked on my linguine.
But it does touch on a serious point, something that is relevant this week, and particularly relevant for little ladies of three and bigger ladies of 43: on average, women end up with half the pension of men by age 50.
The pensions company Aegon has just published research that shows that by age 50, women save on average £56,000 in their pension funds compared to £112,000 for men. Exactly half.
This leaves the woman aged 50 in the position that she’d have to save an extra £360 per month to catch up with her male colleague, Aegon says.
If you read this column regularly – and you should, because it takes me long enough to write it – you’ll know that this gender inequality has been flagged up many times, by many different reports from many companies.
You’ll also know why: a general gender pay gap where women earn less than men, combined with the ‘motherhood penalty’, which breaks a mum’s pensions saving for five or 10 years while she takes a career break to raise her children. Then there’s a third factor: even when full-time mums return to the workforce, they are much more likely than men to take only a part-time job, which hampers their freedom to save even more.
Aegon’s figures seem to confirm that it’s the ‘family’ years from 30-40 that hit your pension hard.
For a younger woman turning 30, the average pension fund stands at around £21,000, while a man’s is £27,688.
By the time she turns 40, however, having probably taken her family career break, her fund is around £38,000 while the man has streaked ahead to £56,000. And by 50, as we saw above, her £56,000 is half of his £112,000.
What can you do about this? Take advice. The research also shows that lack of information and advice is decisive in shaping the gender pensions gap.
Aegon says that more than one in four women (28 per cent) don’t know how much they’ve saved, compared to 9 per cent of men.
Without information, there can be no planning to set a realistic savings target, that links what you are putting away now to the lifestyle you’d like to have in retirement. More than two women in five (42 per cent) have never given a thought to how much they will need. This gives them little control over when they can retire, and whether they’ll run out of money when they do.
The key to planning for retirement is today – while you are still far enough out from your last working day to make changes that will really make a difference.
Advice is like Janet’s chips. “If ya don’t ask - ya don’t git none!”
:: Michael Kennedy is an independent financial adviser and pensions specialist, and can be contacted on 028 71886005 . Further information on Facebook at “Kennedy Independent Financial Advice Ltd”
