The gender gap between annual expected retirement incomes for 2017 has widened by £1,000, with men’s average expected income increasing while that of women has dropped back, according to Prudential.
Research by the group has indicated women expecting to retire this year will now be £6,400 a year worse off on average than their male counterparts – and nearly £200 a year worse off than women who retired in 2016.
Women retiring this year can expect an average annual income of £14,300 but, while that is the second highest amount on record, it is down from last year’s figure of £14,500.
Despite the drop, the survey found women feeling slightly more confident about their finances, with half (50%) saying they were financially well-prepared for retirement, compared with 48% in 2016.
Meanwhile men’s expected retirement incomes have shown a fifth consecutive year of growth. Men retiring this year can expect an average annual retirement income of £20,700 – £900 more than last year.
The Prudential study – which surveyed 10,605 non-retired UK adults aged 45 and over, including 1,000 planning to retire in 2017 – suggested men retiring this year would be 45% better off than women.
According to Prudential, the gender gap was at its widest in 2008 when the average expected retirement income for men was 84% higher than the equivalent figure for women.
‘No equality’
The group’s retirement income expert Kirsty Anderson said the widening of the gender gap highlighted by the survey probably reflected the fact many women will enter retirement having taken career breaks and changed their working patterns to look after dependants.
“With a greater number of women staying in the workforce for longer these days, and employers increasingly offering more flexible working patterns, the outlook looks more positive for women’s retirement incomes in the future,” she added.
Anderson also described it as “encouraging” that many women planning to retire in 2017 were feeling financially well prepared.
Jane Cowley, campaign director of Women Against State Pension Inequality (WASPI), was less optimistic, however, observing: “Prudential’s research only goes to underline what WASPI women have known all along – there is no equality between men and women in retirement.
“The government’s mismanaged attempts to equalise the state pension age have exacerbated this situation, with women receiving one year’s notice of a six-year increase to their state pension allowance, while men had six years’ notice of a one-year increase.”
She added: “WASPI supports the equalisation of state pension ages, but calls on the government to address the unfair way in which they have been carried out, which has only compounded the inequalities in retirement income already experienced by 1950s women.”
Meanwhile, the Department for Work and Pensions called the findings into question.
It said: “Thanks to our pensions reforms we expect 3.6 million women to be newly saving or saving more by next year compared to 2012 and the new state pension also means that, by 2030, three million women will on average be better off by £550 a year.
“But there is more to do to ensure that women have the opportunity to build up the pensions savings they will need, which is why we will be increasing minimum contributions for workplace pensions over the coming years.”
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