Pensions savings on the increase, but women still lagging

There is no doubt that the nation has been hit hard by the recession, but pensions savings are bucking the trend to see marked rises, according to the fifth annual Scottish Widows UK Pensions Report

The Scottish Widows Pensions Index, which tracks the percentage saving adequately for retirement, has risen from 51% in 2008 to 54% in 2009. While the Scottish Widows Average Savings Ratio has risen from 8.7% to 9.3% – the highest recorded in five years

As the nation has struggled against the recession in recent months, the number of people saving adequately for their pensions has actually increased by 8%. However, there is still a worrying gender divide in how much is saved and the gap is widening. According to the report, 59% of men are saving adequately compared to just 47% of women. The over 50s are also suffering, with this group the most likely to have cut their savings in the last 12 months (21%). Women over 50 have been hit the hardest, the index has fallen from 57% in 2008 to 52% this year.

Ian Naismith, Head of Pensions Market Development, Scottish Widows said:

“We have seen our Index and Ratio figures rise considerably once again this year so the message that people need to improve their pensions savings is certainly getting through. The rise in those saving adequately cannot be solely attributed to pensions savings. Non-pensions savings has continued to rise, but total investments held have continued to fall suggesting that people are putting aside more but also withdrawing from their savings in the short term.

“In addition to this, contributions to employer-sponsored Defined Contribution (DC) schemes have increased, especially amongst higher earners. With many employers closing Defined Benefit (DB) schemes, they may be contributing more than the average to DC schemes. But there is still more that needs to be done from both the Government and the industry to better encourage pensions savings for the long term, particularly in the current economic environment. With 19% of those that should be saving putting aside nothing at all there is still a big challenge ahead.”