Women’s retirement income hits record high but it’s £5k lower than men’s
While women’s expected retirement income has hit a record high, research from Prudential’s ‘Class of 2018’ study revealed they are still 29% worse off than men.
Men can expect to retire with an average annual income of £21,800.
But the good news, according to Prudential, is that the retirement gender pay gap is shrinking, and is now the second lowest on record.
The gap was at its widest in 2008, the first year of the report, when men’s expected retirement income was 84%, or £9,500 higher than women’s.
Both men and women are now retiring on a higher average annual income than at any other time over the last 11 years. Women retiring this year will be £2,600 a year better off than last year, while men will be £1,150 better off:
But despite this, women aren’t feeling as confident about their finances compared to previous years, with 47% stating they are financially well-prepared for retirement, compared to 50% in 2017. Nearly six in ten (59%) men, on the other hand, feel financially prepared for retirement.
Kirsty Anderson, a retirement income expert at Prudential, said: “The retirement income gender gap is still too wide, at nearly £5,000, with women struggling to match the incomes generated by men.
“However, it is really encouraging to see that the retirement income gender pay gap is shrinking over consecutive years and women are starting to close the gap on men. It is also extremely positive news that expected retirement incomes this year are the highest on record.”
Anderson added that as working patterns continue to change and become more flexible, and shared parental leave is more widely encouraged, the future “looks positive for narrowing the retirement gender gap”.
“It can be difficult to justify any extra expense when taking a career break, but it is extremely important for anyone taking time out of work to maintain their pension contributions. Saving as much as possible as early as possible is the best way to secure a good quality of life in retirement,” she said.