Women could run out of money after just seven years in retirement, new analysis from interactive investor has revealed.
Following recent data from the Government which showed that women have on average £81,000 in their pension by age 55-59, compared to £156,000 for men, interactive investor warned “time is ticking” for women.
Assuming that women claim the full State Pension at age 67, women with a pension pot worth £81,000 could run out of money in retirement at age 74. Meanwhile, men with £156,000 could see their pension last for 17 years on average until age 84, based on pension withdrawals of £11,000 a year, calculations by the investment platform show.
Camilla Esmund, senior manager at interactive investor, said: “We’ve long been vocal on the need for the gender pensions gap to be given the urgent attention it demands, as well as the importance of greater pension engagement in the UK more broadly.
“The gender pension gap means that thousands of women risk having little to supplement the State Pension. Despite having lower pension values, women live for longer on average in retirement and are often left struggling financially in old age once their pension wealth has dwindled.”
Esmund said women continue to face “multiple and systematic” hurdles when it comes to building pension wealth, including the pay gap. In addition, they are more likely to work part time or take time out of the workplace to care for loved ones, leading to a lifetime of lower contributions and the potential for a smaller pension pot.
Esmund added: “It’s important to acknowledge these challenges because without research and data reflecting the true realities of pay and retirement planning, we won’t be able to address the gap meaningfully.
“There are a lot of factors at play here but this also comes back to the sheer importance of greater pension engagement in the UK. We need to help empower women to take control of their pension wealth at an earlier stage, but also to remind them it’s not too late to make a difference if you’ve spent time out of the workplace.”
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