Women retiring in 2021 get £5,000 less pension than men
WOMEN retiring this year will have to manage on pensions almost £5,000 less than their male colleagues, figures revealed yesterday.
Men are set on average to enjoy an annual income of £23,646 to fund their retirement dreams – 25 per cent more than the average female worker, who will have £4,655 less at £18,991.
This gender pensions gap is even more stark if taken over a 20-year retirement period, when men can expect to receive £93,000 more than women.
However, 2021’s crop of new pensioners has seen the gender gap close slightly from 2020 when men’s £22,876 came in at £5,114 more than women (£17,762).
The research has been published by equity release adviser Key in its latest Retirement Ready 2021 study into the finances and ambitions of over 1,000 people expecting to finish full-time work this year.
Nearly a third of women (29 per cent) expect to retire on less than the Joseph Rowntree Foundation’s Minimum Income Standard of £12,500 – a proportion that has risen from 27 per cent in 2020.
And worryingly, a large proportion
of women retiring this year do not know what their retirement income will be, with one in five unsure about their finances – more than double the proportion of men (9 per cent). Maike Currie, investment director at Fidelity International, said: “Women already face myriad saving challenges from the so-called ‘motherhood penalty’, to the ‘good daughter penalty’ – when they’ve given up promotions or cut hours to care for elderly parents – and the gender pay gap.
“While these factors are challenging, often they’re beyond our control. What we can control, however, is how much we are putting into our pensions.
“Industry, government and women themselves need to step up to ensure women are informed and equipped with the right tools, guidance and advice to prepare for retirement and ensure financial independence.”
Fidelity’s own research also reveals that nearly half of women (49 per cent) do not think they will have enough in their pension pot for the lifestyle they want in retirement.
For many, it’s pressure on their current finances that holds them back from saving more, with 46 per cent of women saying they cannot afford to put aside extra cash.