Prudential research: Retirement income gender gap has reduced

The retirement income gap between men and women has shrunk by £900 to £6,500 since last year, according to new research from Prudential.

The Class of 2011 study, which surveyed employees planning to retire this year, found that the average woman expects an annual income of £12,900 compared with an average male expected income of £19,400.

Despite the gender gap decreasing from £7,400 when women expected an income of £12,200 and men expected £19,600, it is still a marked difference from 2009 when women’s expected retirement income was £13,700.

The retirement income gender gap is at its widest in the south west of England where retired women expect £11,700 a year less than men.

The research found that employees planning to retire in 2011 expect to have an average income of £16,600, marginally higher than 2010’s figure of £16,500.

Meanwhile, in the south east of England the expected retirement incomes for men and women are essentially equal.

Vince Smith-Hughes, head of business development at Prudential, said: “It is good news that average retirement incomes for women have risen, but unfortunately the gender gap remains stubbornly wide.

“There are a number of actions that women can take to help to boost their retirement income. For example, it is a good idea to maintain pension contributions during any career breaks and to explore making voluntary national insurance contributions after returning to work.

“It is imperative for anyone looking to secure sufficient retirement income to start saving as much as they can, as early as they can and to seek professional financial advice in the run up to retirement.”

Joanne Segars, chief executive at the National Association of Pension Funds (NAPF), added: “The big gap in retirement income between the genders is a serious issue, and the sums involved can make a huge difference to a pensioner’s lifestyle.

“Sadly many women lost out on the chance to build their pension when they left work to start a family, and too many are reliant on their husband’s pension. It is important that everyone has a pension in their own right.

“The gender gap may have narrowed slightly, but our society as a whole remains on a collision course with its retirement.

“Too many people are not saving, or are not saving enough. We have to get more people focused on putting something aside for their older age.

“Government plans for a simpler, more generous state pension should help, as will the introduction from 2012 of automatic enrolment into a workplace pension.”

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