The gender pensions gap for over-55s has widened to more than £180,000, new research from more2life has found.
According to the analysis from more2life and Cebr, men anticipate an annual retirement income of £20,712, while women expect their income to be £14,964, resulting in the pensions gender gap rising to as much as £183,936.
This comes despite the fact women contribute 9.4% of their income into their pension compared to 8.3% among men.
more2life said its findings suggest women will need to work an additional 14.5 years to catch up with their male counterparts.
The data also showed that women have lower incomes in retirement across all lengths of their working life. Men who have worked full-time for 30-34 years receive an average annual retirement income of £22,776, while their female counterparts receive £17,004. However, the widest gap between genders was among those who have worked for more than 50 years, with men receiving £19,404 compared to £11,592 for women.
Dave Harris, chief executive officer at more2life, said: “Although women appear to be better at saving into their pension, they still face a retirement that is less comfortable and financially secure than their male counterparts.
“The stark difference in retirement incomes highlights the need to address the root causes of financial gender inequality and better support women as they make choices around how to use their assets both in the lead up to and during retirement.”
The latest £183,936 gap marks a sharp increase on last year’s £157,263 figure. more2life said the significant jump was driven by the pandemic and its impact on the value of pension pots as well as the ability of over-55s to save into them.
One in three (30%) women say their financial situation has worsened since the start of the pandemic, compared to a quarter (24%) of men who said the same thing.
Harris added: “Today’s figures are another alarming wake-up call about the gender disparity in retirement. It’s clear that the Covid-19 pandemic has caused significant disruption to many people’s retirement savings but the impact has been most acutely felt among older women.
“As we begin to think about what a post-Covid society looks like, it’s vital that the industry and Government does more to encourage women to engage with long-term financial planning.
“Raising awareness of alternative retirement income sources such as property wealth is crucial in ensuring current and future retirees can enjoy the retirements they deserve. There are a range of products on offer in the later life lending market, including equity release which has proven to be a popular solution for older homeowners looking to unlock the wealth tied up in their homes to fund their retirement.
“For women, exploring such options could offer greater financial stability in later life and help them manage the impact of the retirement gender gap.”
Responding to figures from more2life, Helen Morrissey, senior pensions and retirement analyst at Hargreaves Lansdown, said: “These figures are concerning and back up our own research showing women are struggling to recover financially in the current environment as a result of redundancy and furlough. Our research showed 62% of women worried about being able to afford to pay enough into their pension in comparison to 57% of men.
“However, there are things that women can do to plug the gap. It’s not too late to make a difference to your pension value by continuing to contribute after the age of 55. You should also check with your employer to see if they will match any further contributions as this can give your retirement planning a real boost. State pension and benefits also form an important part of your retirement income and so you should check what you are entitled to and whether there are any gaps that need to be filled.”
