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Women more prepared for retirement following pension freedoms

Paloma Kubiak
Written By:
Paloma Kubiak
Posted:
Updated:
27/01/2016

Women are more prepared for retirement and are contributing more into their savings pot in light of the pension freedom changes, according to research.

Aegon’s UK Readiness Report revealed 7% of the female population is on track to reach their expected retirement income, up 2% since April 2015.

Women have become more realistic about their retirement age since April 2015, now aiming to retire a year later, at 64.

Women also expect a retirement income of £40,700 a year, lower than the £45,800 expected by men.

However, both these figures would require a savings pot of more than £1m – higher than the new pension lifetime allowance which comes into effect this year. (A guide to the pension lifetime allowance changes)

While both sexes remain unrealistic, the gap between women’s desired and likely retirement income has narrowed by £3,400 over the past six months. This compares to just a £50 reduction for men.

According to the study, nearly one in five (18%) men and a sixth (15%) of women pay more into their pension savings as a direct result of the freedom reforms.

Pension reform fraud

Aegon also warned fraudsters continue to target people by offering early access to their pension pots.

The survey revealed 23% of men and 16% of women in the UK have received a cold call offering a free pension review or pension investment opportunity and 18% of men and 12% of women have received an offer suggesting they can access their pension pot before 55.

In addition, 13% of men, and 9% of women have received a text message offering a free pension review or pension investment opportunity.

Kate Smith, regulatory strategy manager at Aegon said: “Women are making the biggest steps when it comes to getting on track for the retirement they aspire to. Since April 2015 there has been a shift as women in the UK have become more realistic about their retirement income expectations, increased their expected retirement age, and started to close the gap to their male counterparts.”

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