Women £6,500 worse off in retirement
Women are £6,500 worse off a year in retirement than men, according to figures from Prudential. The average pension income for women about to retire is predicted to be £12,900 compared to the £19,400 annual amount that men expect to receive.
Prudential's Class of 2011 survey asked men and women approaching retirement to predict how much they anticipate receiving once they retire.
The survey also showed significant regional variations.
In the South East there is no gap, but in the South West the difference is £11,700. In Scotland the gap is £9,300, while the gap is only £3,900 in the Yorkshire area.
However, the average gap has reduced since last year, when women were £7,400 worse off.
Tom McPhail, head of pensions research at Hargreaves Lansdown, says this a reflection of the various reforms and changes in recent years to address the gap.
"A lot of work has been done in recent years to equalise pay and pensions from the Barber versus Gre case in the 1990s [a landmark pensions case where it was ruled that gender discrimination could play no part in deciding pension sums] and most recently the government's announcements of a universal state pension paying around £140 to be introduced.
"We have also seen more and more employees retire later and more women returning to work sooner after having children."
McPhail expects the gender retirement pay gap will reduce further in the coming years, although he doesn't think it will ever completely close.
"There will always be a discrepancy while women take on more of the active responsibility of bringing up children," he says.
How can women close the gap?
Women can top up their pensions by making voluntary contributions while on career breaks and also top up their national insurance levels so that they receive a higher weekly state pension. Extra weekly contributions are set at £12.60 for what is known as class three contributions or £2.50 for class two levels (applies to those who are self–employed or work abroad).
You can also pay larger one–off amounts to level out particular gaps. For more help and to check your record for the last six years contact the national insurance helpline on 0845 915 5996.
For a state pension forecast speak to the Department of Work and Pensions' pension service 0845 3000 168 or call +44 191 218 3600 if you live abroad.
A scheme originally established in 1944 to provide protection against sickness and unemployment as well as helping fund the National Health Service (NHS) and state benefits. NI contributions are compulsory and based on a person’s earnings above a certain threshold. There are several classes of NI, but which one an individual pays depends on whether they are employed, self-employed, unemployed or an employer. Payment of Class 1 contributions by employees gives them entitlement to the basic state pension, the additional state pension, jobseeker’s allowance, employment and support allowance, maternity allowance and bereavement benefits. From April 2016, to qualify for the full state pension, individuals will need 35 years’ of NI contributions.