The gap between what women earn and save compared to men continues to grow according to Office for National Statistics figures released today.
Analysis for young people aged 16 to 29 shows the level and growth of median annual earnings were generally lower for women than men whether they were degree or school-educated or had no qualifications. Men in this age group with a university education in London earn, on average £27,081, while women with same background earn about £24,767.
Jon GreerJon Greer, head of retirement policy at Quilter, comments, “Are women better savers than men? It’s a hard question to definitively answer but the figures are pointing that it may in fact be true as 16 to 29 year old women are still earning less than men, but have larger private pensions.”
Figures from the ONS reveal that on average younger women no matter their background or ethnicity are still earning less than their male counterparts. A gap in earnings between genders for those just entering in the workforce is astonishing, but there may be a number of factors at play, including the kind of occupation each are entering and the average starting salary of those occupations.
The earnings figures come as further surprise when considering the average pension for these groups.
Historically, men have had a substantially higher median pension value than women. However, that trend has begun to reverse in recent years. Numbers from the ONS show women aged 16 to 24 have about £3,900 in a pension compared to men who have about £3,000. However, separate figures show women of that age group have a higher average pension wealth than men. The gap becomes starker at ages 25 to 34 when women have about £14,400 in a pension, while men have £12,100.
With lower earnings, but more in their pensions, there seems to be one logical conclusion – younger women are better savers than their male peers. Saving more from a young age is of vital importance because of the magic of compound interest. Auto-enrolment has gone a long way to boost pension participation in the workplace, but with the current contribution levels still low supplementing with additional savings is crucial.