Single parents with dependent children have pension savings worth just a quarter of those held by couples with children, new research from interactive investor has revealed.
Analysis of Office for National Statistics (ONS) data shows single-parent households have an average pension wealth of £24,000, compared to £97,000 for couples with dependent children, coming to a pension shortfall of £73,000.
The poorest single-parent households face an even bleaker situation, with pension savings of just £4,800 – nearly eight times less than couples with dependent children, who have £34,200 on average.
This significant shortfall in pension provision leaves single parents at greater risk of poverty in later life, according to the research examining household wealth data up to March 2022. Beyond pensions, the wealth gap remains stark when examining other financial assets.
Single parents with dependent children have average household wealth of just £900, excluding pensions, property and physical possessions.
This figure is almost nine times lower than couples with dependent children, who have average wealth of £8,000.
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The disparity becomes even more pronounced at different wealth levels across household types. The wealthiest single-parent households with dependent children have average wealth of £6,000.
This falls dramatically short of other family structures, with wealthy couples with dependent children holding £42,000 and couples over state pension age accumulating £185,800.
At the lowest end of the scale, the poorest single parents with dependent children are £1,200 in debt on average.
Couples over state pension age emerge as the wealthiest household group, with average wealth of £62,600.
Single parents face a “staggering” pension savings shortfall compared to their partnered counterparts
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Myron Jobson, a senior personal finance analyst at interactive investor, warns that single-parent families face systemic barriers to building wealth.
“Household wealth among single-parent families with dependent children isn’t just lagging – it’s light years behind other household types,” he said.
“The financial burden of raising a family alone, coupled with lower earning potential and limited access to wealth-building opportunities, puts single parents at a severe disadvantage when it comes to long-term financial security.”
He notes that while couples can build wealth together through dual incomes, single parents often struggle to save.
“While dual-income households can build wealth together, single parents are often left treading water, struggling to save for the future,” Jobson explains.
The analyst cited the particular detrimental impact on women, who make up a significant proportion of single parents.
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Analysts have previously warned that single people in UK are paying more than couples as part of the “singles tax”
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“The wealth gap for single parents tends to affect women more, and the reasons are deeply rooted in both economic realities and societal norms,” he added.
Women often face career interruptions and reduced working hours to manage childcare responsibilities, which impacts their earning potential.
However, the analysts noted the financial strain of single parenthood affects both genders.
“The financial pressures of raising a child alone don’t discriminate by gender, and single dads can also find themselves falling far behind in savings and pension provision,” Jobson adds.