Retirement income gender gap grows by £1,000 in a year, survey finds

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The retirement income gender gap has grown by £1,000 over the last year, a survey has found.

On average, a woman retiring in 2017 will be £6,400 a year worse off than a man retiring this year, according to research from Prudential.

When similar research was carried out a year earlier, a woman retiring in 2016 would have typically expected to be £5,300 worse off annually than a man preparing to give up work. 

Women planning to retire in 2017 expect to have a typical annual retirement income of £14,300. This is £200 less annually than the £14,500-a-year income that women retiring in 2016 were expecting to live on.

By contrast, men's expected retirement incomes have been growing for five years in a row. A man retiring this year can expect to have £20,700 annually to live on typically, while a man retiring in 2016 had an average income of £19,800.

The retirement income gender gap is at its widest since 2014, when women retiring in that year typically expected to be £6,700 worse off than men annually.

Kirsty Anderson, a retirement income expert at Prudential, said: "The gender gap in retirement incomes continues to grow, probably reflecting the fact that many women will enter retirement having taken career breaks and changed their working patterns to look after dependants.

"Unfortunately, as a result, many women will end up with smaller personal pension pots and some are also likely to receive a reduced state pension.

"For anyone who takes a career break, maintaining pension contributions and, where possible, making voluntary national insurance contributions after returning to work, should help to minimise the impact on their retirement income."

She continued: "However, with a greater number of women staying in the workforce for longer these days, and employers increasingly offering more flexible working patterns, the outlook looks more positive for women's retirement incomes in the future."

Some 1,000 people planning to retire in 2017 took part in the survey.

A Department for Work and Pensions (DWP) spokesman said: "Thanks to our pensions reforms, we expect 3.6 million women to be newly saving or saving more by next year compared to 2012 and the new state pension also means that, by 2030, three million women will on average be better off by £550 a year.

"But there is more to do to ensure that women have the opportunity to build up the pensions savings they will need, which is why we will be increasing minimum contributions for workplace pensions over the coming years."