New personal savings accounts: a winner for women?

12 December 2006

The Government’s plan to introduce a new system of personal saving accounts1 is proving popular with women, according to new findings revealed today by Age Concern. But the charity is warning that the Government must keep costs down and employer contributions up if the scheme is to be a success.

Three-quarters of women questioned by the charity are in favour of personal accounts, with 82% saying the offer of a good pension scheme would encourage them to save more. 2 These findings are released as the Government prepares to publish its second White Paper on pensions reform, 3 which will put forward plans for a new national savings scheme.

Official figures show that up to 9.6 million people under pension age are not saving enough for a decent income in retirement, and women are particularly at risk. Many are failing to make retirement savings because they cannot afford to save, cannot afford to shoulder more risk or simply do not have access to a pension at work. Workers are least likely to have a pension in industries where women are most likely to be employed, with 92% of female hotel and restaurant workers not currently contributing to a work pension scheme. 4

Age Concern is calling on the Government to set up a system of personal accounts – previously dubbed the NPSS5 or ‘Britsaver’ – using the model recommended by the Pensions Commission in November 2005. The charity believes that a single, national, low-cost scheme with a limited choice of funds is the way to make saving pay for millions more women.

Michelle Mitchell, Head of Public Affairs at Age Concern, said:

“These figures show that there is strong female support for this sort of saving scheme. Personal accounts are good news for anyone without access to a decent occupational pension, particularly the millions of women who are currently missing out.

“But to make savings pay, the Government must keep the costs down and compel all employers to make a decent contribution. Investment in the scheme will also be essential to ensure that good quality, timely information and targeted financial education is provided to help women make informed savings choices.”