Retirement gender pay gap narrows but men still set for 50% higher pensions than women

The retirement gender pay gap is £6,500 per year, although it has shrunk slightly over the last 12 months, according to new research from Prudential.

Men expect to retire on average incomes of £19,400 per year – 50% more than women, who anticipate incomes of £12,900. Prudential’s “Class of 2011” study shows that the retirement gender gap is £900 smaller than last year when the study showed a £7,400 gap with women expecting incomes of £12,200 while men looked forward to £19,600. However, women who planned to retire in 2009 expected an annual retirement income of £13,700.

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.”

Joanne Segars, chief executive of the National Association of Pension Funds, said: “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.

“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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