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Wednesday, 20 April 2016

Women risk pension poverty to pay for childcare, Fawcett Society warns

Written by The Press Association

Young women are cutting their pension contributions to cover the cost of childcare, risking poverty when they retire, a new report has warned.

The Fawcett Society said women in their 20s and 30s were often relying on their partner for a secure retirement.

Many were taking full responsibility for childcare costs, or were taking a break from work to look after children, a study found.

Student debt and childcare costs were preventing women from saving, according to research by the women's equality charity and University of Sheffield, supported by Scottish Widows.

Sam Smethers, chief executive of the Fawcett Society, said: "The gender pay gap becomes a pensions gap in retirement. In particular, women are taking a big hit on their pensions when they have children, but are not aware of the impact this will have on them in the long-term.

"Women are putting everyone else's needs before their own, especially when it comes to who pays for childcare. Their baby becomes her childcare bill."

Jackie Leiper, retirement expert at Scottish Widows, commented: "The findings of the report echo those of our own, showing a clear shortfall developing when it comes to retirement savings between men and women in their 30s.

"Despite similar levels of engagement between men and women in their 20s, this begins to drop at an alarming rate over the following decade."

A Department for Work and Pensions spokesman said: "We want all women to have a financially secure retirement, which is why we introduced wide ranging reforms to make pension saving easier and clearer, including through the introduction of the new state pension and automatic enrolment.

"We are also committed to supporting mothers by making childcare more affordable and more accessible, and we are doubling free childcare for nearly 400,000 working parents of three and four-year-olds from 15 to 30 hours."

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