Pension shortfall: Women to retire with £6,600 less than men a year

08 April 2009 / by Rebecca Sargent
Women retiring in 2009 are expecting to receive an average of £6,642 less than men each year from their pension, research from Prudential has revealed.

According to the retirement survey, women are expecting an annual pension income of £13,671, which is £6,642 less than the £20,313 a year expected by men.

The pension annuity shortfall equates to a collective total of £42billion each year, which could explain why the survey also found that 18 per cent of women expect to work past the standard female retirement age, compared to just five per cent of men who expect to do the same.

Commenting on the findings, annuities business director at Prudential, Karin Brown, said: "It's still a shock to see so many women retiring at such a disadvantage to their male colleagues, despite all we know about the causes of pension discrepancies between men and women."

According to Ms Brown, the gender gap is firmly established as women earn an average of 17 per cent less than men, while women take career breaks to have children, which impacts on their company and state pension contributions.

Meanwhile, Ms Brown added that the increasing divorce rate means that more and more women no longer have a spouse's pension to fall back on.

As a result, Ms Brown recommends starting pension contributions early, "Starting a pension at an early age will lessen the impact in later life of many women's decision to take a career break to have children," she said.

Adding: "It will also mean people can feel confident that they are going to have enough money to live off when they do come to retire, and this is vitally important for women who expect to receive smaller pensions than men."

Get pension quotes and advice »

© Fair Investment Company Ltd