Women are nearly £5k worse off in retirement than men

Women stopping work this year will have an average expected retirement income £4,900 lower than men.

This has emerged in new research from financial services group Prudential.

But it adds that the good news is that the expected retirement income of females has hit a record high - and the UK gender gap is shrinking.

Prudential has, for the last 11 years, tracked the finances, future plans and aspirations of people planning to retire in the year ahead.

Men are anticipating they will retire in 2018 with a typical annual income of £21,800 compared to £16,900 for women - a difference of 29%.

Prudential says the Joseph Rowntree Foundation’s minimum income standard states the income for a single pensioner should be at least £9,998.

The financial services group adds that it has found that one in six women will be retiring with an income below this standard - compared to just one in 10 men.

But the retirement income gender gap is now the second lowest on record.

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.

Females retiring this year will be £2,600 a year better off than in 2017, while males will be £1,150 better off.

Kirsty Anderson, a retirement income expert at Prudential, said: “The retirement income gender gap is still too wide, at nearly £5,000, with women struggling to match the incomes generated by men.

 “However, it is really encouraging to see that the retirement income gender pay gap is shrinking over consecutive years and women are starting to close the gap on men. It is also extremely positive news that expected retirement incomes this year are the highest on record.

“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.

“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.”

Retirement planning

It can be hard to plan for tomorrow when we’re busy living for today, but if you begin planning and saving now you’ll have more options in the future.