The gap between the amount of money a man has at retirement compared to that of a woman is expected to grow again this year.
Latest figures from the Prudential show that a man retiring in 2017 will have around £6,400 a year more in his pension pot than a woman retiring this year. For women, the average annual income from their pension is £14,300 while for men it’s £20,700 – that makes men 45% better off than women leaving the workplace at the same time.
The yearly gap is up £1,000 on the figure in 2016 and is the third increase in as many years.
The gap is a result of the time women spend not saving for their pensions, being out of the workplace due to raising their families and retiring earlier.
However, looking at a wider timeframe, the trend is moving in the right direction. The Prudential first began looking at the retirement fund gender gap in 2008 when the gap was a massive 84%. Steadily, thanks to employers making pension schemes more readily available and the Government launching a number of pension reforms, more women are saving for retirement and beginning to do so earlier in their working lives.
Interestingly, when quizzed this year, over half of the women questioned who are about to retire said they feel confident about their future finances.
As quoted in Personnel Today, Kirsty Anderson, a retirement income expert at Prudential, said, “It is encouraging that many women planning to retire this year feel financially well prepared for their futures. In fact, women’s expected retirement incomes this year are the second highest on record.
“However, the gender gap in retirement incomes continues to grow, probably reflecting the fact that many women will enter retirement having taken career breaks and changed their working patterns to look after children.
“Unfortunately, as a result, many women will end up with smaller personal pension pots and some are also likely to receive a reduced state pension.”
However, with ever growing workplace initiatives such as extended parental leave and increased diversity, we imagine this gap will become smaller in the coming years.
Pension contributions are now a key employee benefit which many businesses offer. If you feel you aren’t getting the best deal from your current job, maybe it is time to look for something new and ensure you are prepared for the future. If so, take a look at the range of vacancies we have available today.
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