Last updated on February 4th, 2023 at 06:15 pm
Let’s talk about money for a minute (again)… 2023 is really the year when we should be getting more money-savvy. Unfortunately, as single parents, we need to come to terms with the fact that we are often overlooked in ‘the system’. Nobody is going to come and help us, we can only help ourselves. And one of the main ways we can do that is by staying informed. Today I want to talk about single mums and their pension.
Scottish Widows published their findings of a study on Pensions, and it showed that single mothers in the UK are facing a huge shortfall in their pension pots, in comparison to married couples. This shortfall is being made worse by rising inflation, and falling wages.
Single Mums’ Pensions are Disproportionate Compared to Couples
£29,000 is the average pension for a single mother, vs. £275,000 for couples with children
Scottish Widows
Considering that 20% of households with children in the UK are single-parent households, that’s a lot of families who are not going to be in a good situation when mum reaches retirement age. Their adult children will likely have to financially support their parents in retirement.
Living situations and care for the elderly can be extremely expensive. As single mums, no matter what age we might be now, we should really be planning financially for the distant future. Otherwise, that burden of care and paying for it will fall on our kids.
40% of Single Mums Don’t Have a Pension Scheme
There are approximately 1.7 million single mothers in the UK, and 40% don’t actually have an active pension scheme. But it’s never too late to start one, and you can set up a pension pot privately, There is a state pension scheme that’s accessible to all, but it’s a basic, low amount. Those who want to learn more about pensions can start here on the citizens’ advice website How much pension you’ll need – Citizens Advice
Single mums have to spend on average 80% of their income, while dual-parent households have to spend around 60% of theirs. This makes it much more difficult for single mums to save money that they can put toward their pension, or put towards anything for that matter. But staying smart with money, staying informed and making good choices can all contribute to making a better financial circumstance for you and your family.
Many Women End Up Relying on State Pensions
Many women rely on state pensions, so it’s important to understand what a state pension is and how much you’d be likely to get. Find out more here State Pension – GOV.UK
It’s unfortunate, unfair and unjust that so many single mums find themselves in this situation with their pension. It always seems like we are fighting a losing battle. The gender pay gap sees the average men’s salary 30% more than womens. Their pensions reflect this, and the average man has far more in his pension savings than the average woman does.
The average woman would actually need £85,000 more than the average man to have the same quality of life in retirement – because women live longer!
Resources
Read the Scottish Widows press release here.
Pension Guides – MoneySavingExpert
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