Home news Retirement income gender gap widens to £6,400

Retirement income gender gap widens to £6,400

51
0


Women expecting to retire this year will on average be £6,400 a year worse off than men – with the gap £1,000 bigger than last year – according to new research.

The study from Prudential said the gender gap appears to reflect the fact that many women had taken career breaks and changed working patterns after having children.
Women retiring this year can expect an average annual retirement income of £14,300 – that’s the second highest level on record but lower than the £14,500 level in 2016.
But the level for men rose for the fifth year in a row to £20,700 – £900 higher than last year.
That is 45% higher than women’s average income, the widest gender gap for three years.
Kirsty Anderson, a retirement income expert at Prudential, said: “The gender gap in retirement incomes continues to grow, probably reflecting the fact that many women will enter retirement having taken career breaks and changed their working patterns to look after dependants.
“Unfortunately, as a result, many women will end up with smaller pension pots and some are also likely to receive a reduced state pension.
“However, with a greater number of women staying in the workforce for longer these days, and employers increasingly offering more flexible working patterns, the outlook looks more positive for women’s retirement incomes in the future.”

Meanwhile, a separate study from Scottish Widows has warned that 70% of 22 to 29-year-olds are not putting away enough money to achieve their desired retirement income.
The report says four in five young workers are now putting something away into their pension pots, with participation boosted by auto enrolment in workplace schemes.
But average contributions – including money put in by employers – are just £184 a month, only enough to help produce an annual retirement income, including state pension, of £15,200.
That falls well short of a desired income of £23,000.
Catherine Stewart, retirement expert at Scottish Widows, said: “Auto-enrolment may well be lulling people into a false sense of security that they are putting away enough for a comfortable retirement.
“For many, that is simply not the case, particularly given retirement is looking more expensive than ever.”

Source: Sky