The average woman to retire this year will be doing so with £6,400 a year less in her pocket than the average man, according to Prudential. This gap is £1,000 more than last year, showing that while men’s income continues to grow, women’s have stagnated over the last 12 months.
Women retiring this year are expecting to have an annual income of £14,300, compared to £20,700 for men.
Prudential has been studying the gender pension gap for 10 years and it currently shows that males retiring this year will be 45% better off than their female counterparts.
Different working patterns
Kirsty Anderson, retirement expert at Prudential says the gap can be explained by the fact that women are more likely to take career breaks than men and their pension savings suffer as a result. It may also mean that they are not eligible for the full state pension.
She says: “For anyone who takes a career break, maintaining pension contributions, and, where possible making voluntary national insurance contributions after returning to work, should help to minimise the impact on their retirement income.”
Ms Anderson adds: “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.”
This is already being borne out in Prudential’s figures. While the gender gap has grown over the last 12 months, over the longer term the gap has narrowed substantially. At its widest, in 2008, men were typically retiring on 84% more than women.
Women confident about retirement prospects
Equally positive is the fact that women appear to be more confident about their retirement finances, with the number of women feeling well prepared rising from 48% last year to 50% this year.
Ms Anderson adds: “It is encouraging that many women planning to retire this year feel financially well-prepared for their years in retirement. In fact, women’s expected retirement incomes this year are the second highest on record.”