Are you a working woman concerned about the impacts of maternity and career breaks on your pension savings? Well, you're not alone. A shocking 61% of women in the workforce express concerns about their retirement savings being negatively impacted by motherhood, according to research by the Pensions Management Institute (PMI).
Out of these working women, 41% admit to being anxious about the effect of employment breaks on their pension growth. A striking 61% have experienced a career break, with a significant majority having taken maternity leave. Out of these, 49% have been out of work for less than a year, and 20% were absent for one to five years.
These career breaks have consequences, and 54% of the surveyed women are worried about how these breaks will affect their retirement plans. PMI warns that despite societal progress, women still face substantial barriers when it comes to securing sufficient pension savings.
But why does this matter so much? The answer is simple: a large portion of employed women, about 60%, rely solely on their pension savings for their retirement. They have no alternative retirement savings. What's more, only 36% of these women know exactly how much they have saved up for their pension. The average savings for those who do know? A modest £23,959.
In comparison, a mere 4% of female employees have managed to save more than £55,000 for their pension. PMI's research echoes the Department for Work and Pensions' findings, revealing that women reach 55 with a third less saved into private pensions than men.
Sara Cook, the president of PMI, highlights the urgent need for addressing these concerns. She states that too many women are troubled about the bleak retirement prospects looming over them, mainly due to the financial ramifications of raising children. Cook emphasizes that society needs to challenge the ingrained bias that places women in the primary child-raising role, as this significantly contributes to the gender pensions gap.
So, is there a solution to this issue? One possible answer lies in better childcare support. Nearly half of the survey participants expressed that enhanced childcare support would allow them to return to work, increasing their productivity and their chances to save more effectively for retirement.
In some Scandinavian countries, maternity leave doesn't cause a drop in women's earnings. It's disheartening to realize that even in 2023, many women are worried about the sacrifices they have to make to raise a family. We need to challenge and change societal norms that lead to women's career breaks being penalized in their retirement savings.
It's high time we recognize and address these financial hurdles that women face. If you're a woman, or if you know someone who might be affected, it's time to review your current retirement plans. Take a closer look at your savings, your potential career breaks, and how these might impact your future.
Are you ready to challenge the status quo and take control of your retirement plans? Start today. Secure your financial future by reviewing your pension savings and seeking professional advice if needed. Every step you take today will help ensure a more comfortable and secure retirement tomorrow.
Remember, it's never too early or too late to start planning for your retirement. Start today, for a secure tomorrow.