Women’s expected retirement income has hit a record high but they will still have an average retirement income £4,900 lower than men if they retire this year, according to research from Prudential.
The pension provider, which polled 9.896 non-retired UK adults aged 45 and over, including 1,000 planning to retire in 2018, found the gender gap is shrinking but women will still be 29 per cent worse off than men.
The analysis showed men are expecting to retire on an average annual income of £21,800, which compares to women’s income of £16,900.
The Joseph Rowntree Foundation’s (JRF) Minimum Income Standard states the income for a single pensioner should be at least £9,998.
However, findings show that one in six (16 per cent) women will be retiring with an income below this standard, compared to just one in 10 (10 per cent) of men.
However, the retirement income gender gap is narrowing and is now the second lowest on record - the smallest gap was recorded in 2015 at a £4,800 disparity.
This is a significant improvement when compared with the widest gender gap in 2008 when the average expected retirement income for men was 84 per cent, or £9,500 higher than that expected by women, the provider said.
Furthermore, both men and women are now retiring on a higher average annual income in 2018 than any other time over the last 11 years.
Women retiring this year will be £2,600 a year better off than last year, while men will be £1,150 better off.
Year of planned retirement
Expected annual retirement income
Kirsty Anderson, retirement income expert at Prudential, argued that “as working patterns continue to change and become more flexible and shared parental leave is more widely encouraged by the government agenda and employers, the future looks positive for narrowing the retirement gender gap”.
She said: “It can be difficult to justify any extra expense when taking a career break, but it is extremely important for anyone taking time out of work to maintain their pension contributions.
“Saving as much as possible as early as possible is the best way to secure a good quality of life in retirement.”
Gem Durham, independent financial adviser at Obsidian, hopes that the gender pension gap continues to shrink in the future.
She said: "The gender retirement gap is of course most troublesome for single or widowed women who did not enjoy spouse’s protection on their husband’s retirement income.
“This is something we should all be concerned about and continue to strive to eradicate but until the gender pay gap is eradicated the gender pension gap won’t be either.”