Retirement Income  

Pensions gap almost triples in 10 years

Pensions gap almost triples in 10 years

The retirement income gap between men and women almost tripled in 10 years, according to analysis from Royal London.

Based on the most recent data published by the Department for Work and Pensions (DWP), in 2006/07 there was a pension gap of £31 per week between men and women.

By 2016/17 this had risen nearly threefold to £85.

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Women’s incomes have risen by just 7 per cent in real terms over the period, compared with an increase of 23 per cent for men, Royal London pointed out.

According to the pension provider, there are two main factors which are increasing this difference between the sexes.

Over the last decade, the real earnings of single women in retirement have largely flatlined and are actually now slightly down on ten years ago - £21 per week in 2006/07, compared to £19 per week in 2016/17.

But for men, the average has more than doubled, from £17 per week in 2006/07 to £37 per week in 2016/17, the provider said.

The second factor is occupational pension incomes, which even though have risen for both men and women, there has been a particularly sharp increase for men.

Women have seen their average occupational pension income rise from £58 to £81 over the decade, but men’s occupational pensions have shot up from £83 per week to £125 per week, stretching their lead over women.

According to Sir Steve Webb, director of policy at Royal London and former pensions minister, “these figures reveal a shocking surge in the gap between men and women when it comes to living standards in retirement”.

He said: “Having a decent occupational pension and the potential to top up pensions with earnings are the two key factors in having a good income past pension age.

“Much more needs to be done to tackle the disadvantages faced by women in the later life jobs market as well as doing more to ensure women are building up better pensions in their own right in the future.”

Recent analysis published by Aegon shows the same trend, as the gap between men and women’s saving pots grows dramatically with age and will result in women being considerably worse off in retirement.