The gap between men and women’s expected retirement incomes have increased by £1,000 in the last year according to new statistics. Research by Prudential has shown the changing trends over the last 10 years in order to work out how those looking to retire soon will be affected by the genderpay gap.
Women planning to retire in the year ahead are expected to be around £6,400 worse off on average per year compared to men, and almost £200 worse off per year compared to women who retired in 2016. After last year’s record numbers, women this year are expected to retire on an annual income of £14,300, the second highest annual retirement income on record, despite the income drop, more people are confident about their retirement finances with 50% believing they are well-prepared.
More concerning for Prudential is that while women’s incomes have seen to stagnate over the last year, men’s retiring income has risen for a fifth year running. The annual income of £20,700 makes this number the highest gender gap for three years, and the £900 increase compared to 2016 means men will be 45% better off than their female counterparts.
Women are statistically more likely to take time off from work or change career paths to take on other responsibilities such as raising children, but while more women are choosing careers, there are concerns with how this isn’t being notably reflected in retirement income. The widest gender gap on record was nearly 10 years ago, when men were expected to retire with 84% more than women, and while this percentage has almost halved since 2008, Prudential believes more needs to be done.
“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,” explains retirement income expert for Prudential, Kirsty Anderson. “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. Consulting a professional financial adviser to ensure that retirement financial plans are on track is a sensible route for many.
“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.”