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Women still worse off in retirement

Women still worse off in retirement

Category: Retirement

Updated: 08/06/2012
First Published: 08/06/2012

MONEYFACTS ARCHIVE
This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

Women are still losing out when it comes to annual retirement income, new research released today has revealed.

Figures from Prudential show that women retiring this year expect their annual retirement income to be a third (or £5,750) lower than their male counterparts - £12,250 compared to £18,000 for men.

However, the study does show that the gender gap for retirement income is narrowing, with a difference of £6,500 between men and women recorded in 2011.

Reasons for the gap include women traditionally earning less than men, meaning they are not able to save as much for their retirement as workplace pensions are all earnings related.

In terms of the State Pension, many women stop paying National Insurance contributions when taking time off work to care for children and other family members, affecting their final retirement income.

The retirement gap is widest in the South East, where women retiring this year can expect their pension to be £7,878 less per year than men - £12,259 compared with £20,137.

In the North East, the gap is the narrowest, with women in this region expecting to have £2,545 less than men - £13,087 a year compared to £15,632.

Worryingly, the study found that nearly half (49%) of women believe they will not have enough income for a comfortable retirement, compared with 40% of men.

Practical steps women can take to improve their position in retirement include maintaining pension contributions during a career break and making voluntary National Insurance contributions after returning to work.

"The Pension Gender Gap appears to be narrowing, but there is still a long way to go. Not only does the gap remain stubbornly wide, but anticipated retirement incomes have this year hit a five year low for both men and women," said Prudential's retirement income expert, Vince Smith-Hughes.

"It is imperative for anyone looking to secure a sufficient income when they retire to begin saving as much as they can, as early as they can, and to do so regularly through life. For those who are still working, it has never been a more important time to save into a pension."

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Disclaimer: Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time.

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