Retirement income lowest for five years
The gap between the value of pensions received by men and women has narrowed, according to a survey by the Prudential.
While this looks like good news on the surface, women are only catching up with men because the average male annual pension has fallen in value, rather than because women’s retirement income has increased.
Taking into account all retirement income, women now have an average of £12,250 to live on in their retirement, compared with £18,000 for men.
The average female pension income hasn’t changed significantly since 2010, when it was £12,200, but the average male pension income has fallen sharply from £19,600 two years ago.
The latest figures from the Prudential reveal a current gender gap of £5,750 in retirement income, significantly lower than the gender gap of £7,400 in 2011.
Taking both men and women into account, the average pension now stands at £15,500, its lowest level for five years.
It has fallen significantly since last year, when the average pension was £16,600, with low interest rates, low returns on investments, and poorly performing annuities all contributing to the decline.
Vince Smith-Hughes, head of business development at the Prudential, said: “Not only does the gap remain stubbornly wide, but anticipated retirement incomes have this year hit a five-year low for both men and women.
“The practical steps that women can take to improve their retirement income prospects include maintaining pension contributions during career breaks and, if possible, make voluntary national insurance contributions after returning to work.”
The Prudential surveyed 1,000 people planning to retire this year.
The latest figures from the Office for National Statistics reveal that more than a fifth of British pensioners are at risk of poverty and are among the poorest in Europe.
British pensioners are ranked the fourth poorest out of 27 countries in Europe, behind only Cyprus, Bulgaria and Spain.