Women’s expected retirement incomes stagnated, while men’s continue to grow
The gender gap in retirement incomes has grown by £1,000 over the past year, according to research from Prudential – with women retiring in 2017 set to be £6,400 a year worse off than men.
The Class of 2017 research also reveals that women will be nearly £200 a year worse off than women who retired in 2016, this year expecting an average annual retirement income of £14,300.
Men’s expected retirement incomes, however, have shown a fifth consecutive year of growth, this year expecting an average annual retirement income of £20,700 – £900: pushing the retirement gender gap to its highest level in three years.
Kirsty Anderson, a retirement income expert at Prudential, says: “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 personal pension pots and some are also likely to receive a reduced State Pension.
“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. The best way to secure a good quality of life in retirement is to save as much as possible from as early as possible in your working life.”
Positively however, the research shows that this year’s female retirees are feeling slightly more confident about their finances, with 50% saying they are financially well-prepared for retirement, compared with 48% in 2016.