Generation Z women - those born between the late nineties and early to mid 2000s - are making steps towards closing the gender pension gap by prioritising saving for retirement better than other generations, according to a new report.
Over half (53%) of women between 22 and 28 have started saving for retirement.
Those who have not yet started plan to start before 25, according to the 2023 Women and Retirement report from Scottish Widows. This compares to 45% of their male counterparts.
It is also a considerable increase on women in their 30s, of whom only 38% are saving for retirement. Less than a third (30%) of women aged between 40 and 49 said they had started saving.
Scottish Widows attributed the change to the combination of Automatic Enrolment and changing attitudes towards parenting.
Almost three quarters (72%) of people in their 20s said they planned on equally splitting childcare responsibilities, in comparison to 56% of today’s mothers.
Under Automatic Enrolment, pension participation rates for eligible employees have more than doubled for employees at private companies since 2012.
Younger generations are set to benefit most from these changes, with more time for their increased savings to accumulate into a larger pension pot, says Scottish Widows.
The recent legislation passed by the Government to reduce the Auto Enrolment age requirement to 18 will be most valuable to the young and lower paid, says the report.
According to the report, a woman who is 18 today and works part-time for their whole life until the age of 68 could have an extra £43,000 in their future pension pot in today’s money due to the changes (a 118% increase).
Alison Nicolson, head of client relationships at Scottish Widows, said: “Seeing the next generation of women taking more control of their finances and starting to save earlier for retirement is a big step forward, but we can’t underestimate how far we need to go to achieve pension equality for women.
"We need to keep up the momentum and with changing attitudes, widespread education and improving pension policies, such as auto-enrolment, we can help create a brighter future for women in retirement.”
• YouGov surveyed 5,072 women in March and April on behalf of Scottish Widows.