SIPP gender gap a 'yawning chasm' says HL

A report this morning from Hargreaves Lansdown found that the pension gender gap continues to grow. Women on average contributed £5,599 to their HL SIPP so far this tax year, 29% lower than the £7,906 average for men. This was despite 60% of women contributing to their SIPP in comparison to 58% of men. Helen Morrissey, head of retirement analysis at Hargreaves Lansdown, said:“The difference between men and women’s pension prospects is not so much a gap as a yawning chasm that simply can’t be navigated without some support. We can’t just tell women that they need to save more for their retirement when they face the significant hurdles of lower pay and the dreaded glass ceiling in their quest for better retirement resilience. "The situation is even worse for mothers who often can only return to work part time, and if you add in the eye-watering cost of childcare, you can see why pensions are put on the backburner in favour of day-to-day expenses. "Data shows women contribute to their pensions just as much as men early in their career, but these factors combine to undermine their best efforts. There are steps women can take to mitigate the damage, such as continuing pension contributions during maternity leave but more needs to be done to help them bridge the gap." The Government currently estimates the gender pension gap at 32% for those eligible for auto-enrolment. The Advice Guidance Boundary Review is considering the role of digital and automated channels in order for consumers to access support with pensions planning, according to FCA CEO Nikhil Rathi. Pension providers must also overcome their fear of being too close to the advice boundary and manage risk rather than eliminate it, Mr Rathi added in his speech to the JP Morgan Pensions and Savings Symposium this morning. He said the FCA was “open-minded” as to how digitalisation can help close the advice gap. Mr Rathi also said that consumers must accept that an investment carries risk but the market must make it clear that receiving no support at all carries greater risk. Over half (54%) of all pension pots accessed for the first time were accessed without advice or guidance, according to figures from the regulator. The regulator added that a third (34%) of over-45s with DC funds to not understand their accumulation options. The FCA and the Treasury launched the Advice Guidance Boundary Review last year in an attempt to encourage the development of regulated and commercially viable guidance services to help close the financial advice gap.

SIPP gender gap a 'yawning chasm' says HL

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