Women retiring this year can expect an annual retirement income that is on average £4,900 lower than men, Prudential has revealed. While this is still a major gap, it has shrunk since the record £9,500 difference seen in 2008, when they first started collecting this data.
Their data furthermore reveals that this year sees the second-lowest gap, with only the £4,800 difference in 2015 able to beat the current low. In contrast, last year saw a gender gap of £6,400, with retiring men able to expect an annual retirement income of £20,700 compared to women's £14,300.
This year, women are still 29% worse off, with an average annual income of £16,900 compared to men's £21,800. What's more, 16% of women will be retiring with an income that is below the Joseph Rowntree Foundation's Minimum Income Standard (which sits at £9,998 at the moment), compared to 10% of men.
In better news, both sexes recorded the highest average income of the last 11 years, as this year's crop of retirees will be on average £1,875 better off than the 'class of 2017'. Kirsty Anderson at Prudential commented that "it is really encouraging to see that the retirement income gender pay gap is shrinking over consecutive years and women are starting to close the gap on men. It is also extremely positive news that expected retirement incomes this year are the highest on record."
Overall, she says that "the future looks positive for narrowing the retirement gender gap." More than half of surveyed women aren't as confident about their pensions as she is, however, with just 47% stating they are financially well-prepared for retirement, down from 50% last year. In contrast, 59% of men are feeling financially prepared.
For those looking at the average annual income of £19,375 (across sexes) and wondering how to get there, the first port of call should be your workplace pension. If you want to have your own savings pot for retirement as well, however, there is the lifetime ISA to consider.
Anyone close to retirement who wants a fixed annual income will want to take a look into getting an annuity.
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