Large rise in women’s expected retirement incomes

Published on

Women looking to retire this year expect to have the highest retirement income on record but the gender gap has started to grow again, according to new research from Prudential.

The annual research, which tracks the future financial plans and aspirations of people planning to retire in the year ahead, is now in its ninth year. It shows that the women in the ‘Class of 2016’ have an average expected retirement income of £14,450 – the highest on record and up £150 on last year.

However, despite the increase in the women’s average expected retirement income, the gap between the two sexes has grown by £600 since last year, to £5,400. Women planning to retire this year expect to live on an annual income 27% lower on average than the £19,850 expected by men in the Class of 2016.

The growth of the gender gap among the Class of 2016 partly reverses some of the gains made by women retiring in 2015, when there was a record fall in the size of the gender gap – of nearly £2,000. Despite this year’s rising gap, the difference between men’s and women’s expected retirement incomes is still around £4,000 less than in 2008, the year when it was at its largest at £9,500.

Although women’s expected retirement incomes are at an all-time high, those planning to retire in 2016 are no more optimistic about having a sufficient retirement income to enjoy a comfortable life than those who planned to retire last year – 40% in 2016 compared with 44% in 2015. In contrast, 60% of men planning to retire in 2016 feel their expected income will be enough for them to enjoy a comfortable retirement.

Kirsty Anderson, a retirement income spokesperson at Prudential, said: “The big increases we saw in women’s expected retirement incomes, as people looked forward last year to the new pension freedoms and the changes to the State Pension, have been tempered somewhat in 2016. It is possible that many women retirees were expecting to receive the new ‘flat rate’ State Pension in full, but having received their illustrations have had to revise their retirement expectations downwards.

“It is an unfortunate fact of life that many women will reach retirement having taken breaks during their working lives that will impact the level of State Pension they will receive and the size of their pension pot. However, there are a number of steps that anyone in this situation can take prior to giving up work to help improve their retirement prospects. These include continuing to make contributions to a pension during career breaks and making voluntary National Insurance contributions after returning to work.

“We have also seen a fall in women’s confidence that they’ll be able to enjoy a comfortable retirement this year. For most people still in work, the best way to secure the highest possible quality of life in retirement is to save as much as possible into a pension as early as possible – and to take professional financial advice before making big financial decisions.”

COMMENT ON MORTGAGE SOUP

We want to hear from you!
Leave a comment and get the conversation started.
You need to register to post, so please login or sign up below.

Latest articles

First-time buyer mortgage activity outpaces home mover market

First-time buyer mortgage applications have outpaced the wider housing market in the second quarter...

HSBC revises mortgage ranges and fixed rate terms

HSBC is making extensive updates to its residential and international mortgage product ranges, with...

Santander cuts remortgage rates

Santander UK has reduced interest rates on all of its 60–75% loan-to-value (LTV) remortgage...

Cavendish unveils new brand to mark 40th anniversary

One of the UK’s longest-standing conveyancing firms has marked its 40th year in business...

The Leeds and L&C streamline applications with open banking pilot

Leeds Building Society and L&C Mortgages have introduced a new automated process that enables...

Latest opinions

Broker proactivity can ease path back to prime

One of the lessons we’ve taken from the ever rising levels of interest in...

We need to look again at two-year swaps…

Over the last 12 months, we’ve seen three notable things happen in the swaps...

How product transfers can help landlords and brokers in a challenging market

In an ever-changing buy-to-let market, the task of managing a property portfolio becomes increasingly...

Finding the ‘yes’ on finance for trading businesses

Pressure on UK trading businesses continues to mount, driven by rising costs, tight cash...

Other news

First-time buyer mortgage activity outpaces home mover market

First-time buyer mortgage applications have outpaced the wider housing market in the second quarter...

HSBC revises mortgage ranges and fixed rate terms

HSBC is making extensive updates to its residential and international mortgage product ranges, with...

Santander cuts remortgage rates

Santander UK has reduced interest rates on all of its 60–75% loan-to-value (LTV) remortgage...