Women receive less pension due to career break
A report by Prudential has revealed that the average male pension is more than £7,000 a year higher than the female pension.
The survey found that a man who draws his pension in 2010 will receive an average retirement income of £19,593, while a woman will receive £12,169.
However, the survey shows that the average annual pension for those retiring varies by £5,000 – depending on where they live in the UK.
The pension gap is widening because many women miss out on a full state pension if they stop working or opt to work part-time to bring up their children.
The survey, of more than 6,000 people, confirms a historical gap between the incomes of retiring men and women, but provides no theory as to why the pension gap is widening.
Karin Brown, director of pensions and annuities at Prudential, comments: “The reason women appear to get less in their pensions than men is embedded in years of history and, to a certain extent, because some women take a career break to have children which has an impact.”
However, from April this year, the Government says new reforms will make pensions fairer and more generous for women.
Entitlement to the full state pension is based on the number of National Insurance contribution credits made by workers or those on certain state benefits. This is currently 44 years for men and 39 years for women.
However, men and women who reach state pension age on or after 6 April 2010 will only need 30 qualifying years to get a full state pension.
The Prudential advises that if possible, people should start to save for their retirement as early as their 20s.