Recent research has revealed that the average expected retirement income for women retiring this year will be £4,900 lower than that of men.
The figures from Prudential did reveal that the amount for women has reached an all-time high, however, with the gender hap continuing to shrink. However, given that the gap is at 29% according to the study, it is still a significant issue.
For more than a decade, the company has closely monitored the finances and later life plans for people prior to entering retirement. Their research draws attention to the prominence of the gap, reflected in the average yearly income for the different genders; whilst men can anticipate a yearly sum of £21,800, the figure shrinks to £16,900 for women.
For a single pensioner, the income should at least be at £9,982 according to the Joseph Rowntree Foundation’s Minimum Income Standard. The research shows that 10% of men and 16% of women won’t hit this threshold.
It is worth noting that the current gender gap between retirement incomes is the second lowest of all time – the first was £4,800 in 2015 – and that both genders are now retiring on a higher average yearly income than ever recorded over the last 11 years.
Commenting on the research was retirement income expert at Prudential, Kirsty Anderson. She said:
“The retirement income gender gap is still too wide, at nearly £5,000, with women struggling to match the incomes generated by men.
“However, 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.
“As working patterns continue to change and become more flexible and shared parental leave is more widely encouraged by the government agenda and employers, the future looks positive for narrowing the retirement gender gap.
“It can be difficult to justify any extra expense when taking a career break, but it is extremely important for anyone taking time out of work to maintain their pension contributions. Saving as much as possible as early as possible is the best way to secure a good quality of life in retirement.”
Also reacting to the findings of the Prudential report, Samantha Seaton, CEO of Moneyhub, commented: “Too many people are still not saving enough for their future, with women at particular risk of facing retirement without enough to live on. While auto-enrolment has made an impact, there is a real risk that if we fail to engage consumers with the need to save, when contributions increase next year, many will opt out. The onus is on providers, employers and government to do more to help people understand their money. The good news is that technology presents a solution by providing a real time, 360-degree view of a person’s finances, making it possible to see where cash can be saved and moved into tax efficient savings that will provide for the future we all aspire to.“
