A report from the Prudential has revealed that women currently retire on a pension that is less than two thirds of their male counterparts’ income.
The survey showed that men have an average pension of £19,593 per annum, compared to the women’s figure of £12,169. These figures include income from both private and state pensions.
The difference of an enormous £7,424 per year is attributed to the fact that women traditionally take time out of their careers for caring responsibilities, meaning that they miss out on valuable years of pension contributions.
Speaking about the survey, Prudential’s director of pensions and annuities Karin Brown was not surprised at the results.
“The reason women appear to get less in their pensions than men is embedded in years of history and, to a certain extent, because some women take a career break to have children which has an impact.”
Although it is widely known that women can buy back missing years of National Insurance contributions and claim home responsibilities protection for their state pensions, these measures do not seem to have closed the gap. The historical difference in retirement ages for the genders has also been a factor. With women retiring at 60 and men at 65, women have missed out on an extra 5 years of earnings to contribute to their pension pots. The gap between their future pension incomes may close as the default retirement age is evened out.
The Prudential surveyed 6073 adults aged over 45 in the UK. 32% of respondents over the age of 55 said that they were delaying the age at which they intended to retire because of the falling value of their investments. Many believed that they were not going to be able to retire completely at all.
The message from Prudential’s Ms Brown is clear. Whether you are a man or a woman, the sooner you start saving for retirement, the better.
“Although many working people may not be able to remedy this situation at a late stage in their working lives, younger people do have a chance to start building a decent pension pot. Prudential believes people should, ideally, start saving for their retirement as early as their twenties or early thirties instead of putting off pension savings until later in life.”
Aside from gender, the survey also revealed a regional difference in retirement incomes. There was a variation of £5,000 per annum between the best off older people in the South East, and those who lived in the South West.
