Retirement income gender gap widens in 2016

Retirement income gender gap widens in 2016

The gap between men and women's retirement income expectations grew in 2016, reversing the reduction of the previous year, research by Prudential has revealed. 

A survey of 1,000 individuals planning to retire this year found that women on average expected to receive £14,540 a year in retirement income.

While this was an improvement on last year's £14,300, and, according to Prudential, the highest on record, it did not match the growth in men's expectation.

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Men expected to receive on average £19,850 a year.

That was up from £19,100 last year, and £5,400 more than women expected to receive.

Last year, the gap was just £4,800.

Despite their actual expected income rising slightly, women were less confident than they were last year: 40 per cent believed their pension would provide a comfortable retirement, compared to 44 per cent in 2015.

Six out of 10 men, meanwhile, expected their pension to provide a comfortable retirement. 

"It is an unfortunate fact of life that many women will reach retirement having taken breaks during their working lives that will impact the level of state pension they will receive and the size of their pension pot," Kirsty Anderson, retirement income expert at Prudential, said.

However, she said there were "a number" of steps women could take to improve their prospects in retirement. 

"These include continuing to make contributions to a pension during career breaks and making voluntary National Insurance contributions after returning to work."

The research also revealed women were much more likely to be dependent on the state pension than men. 

On average 41 per cent of women's retirement income came from the state pension, compared to 31 per cent of men's. 

Twenty-two per cent of women said they had no pension savings, compared to 7 per cent of men. 

In total, 14 per cent of people planning to retire in 2016 said they did not have any pension savings.

The survey came as the Women Against State Pension Inequality continued to fight against the government's changes to the state pension age for women born in the 1950s, raising it from 60 to 66.

The Waspi campaign is currently preparing for a potential legal challenge to the government.