Women face retirement incomes of almost £5,000 a year less than men

One in six women retiring this year will have an income below the minimum standard of £9,982 set by the Joseph Rowntree Foundation

Women’s retirement incomes will hit a record high of £16,900 on average, still well below men at £21,800 (AFP/Getty)

Women face retirement incomes of £4,900 lower per year than men, with the gender gap at a yawning 29 per cent, new research has found.

Women’s retirement incomes will hit a record high of £16,900, on average, still well below men who average £21,800, according to Prudential.

One in six women will have an income below the minimum standard of £9,982 set by the Joseph Rowntree Foundation. That compares to one in 10 men.

However, the gender gap for pension incomes has narrowed significantly from 84 per cent, or £9,500, in 2008, the research found.

Men and women are now retiring on higher average annual incomes in 2018 than any other time over the last 11 years in which the yearly report has been produced.

Women retiring this year will be £2,600 a year better off than last year, while men will be £1,150 better off.

Kirsty Anderson, a retirement income expert at Prudential, said that, despite improvements, the retirement income gender gap was still too wide.

“As working patterns continue to change and become more flexible, and shared parental leave is more widely encouraged by the government agenda and employers, the future looks positive for narrowing the retirement gender gap.

“It can be difficult to justify any extra expense when taking a career break, but it is extremely important for anyone taking time out of work to maintain their pension contributions. Saving as much as possible as early as possible is the best way to secure a good quality of life in retirement.”

Despite retiring with a record high income, women are not feeling quite as confident about their finances as in previous years, with 47 per cent stating they are financially well prepared for retirement, compared to 50 per cent in 2017. Nearly six in 10 men, on the other hand, feel financially prepared for retirement.

Samantha Seaton, chief executive of Moneyhub, said that too many people were still not saving enough for their future, with women in particular at risk of not having enough to live on.

She added: “While auto-enrolment has made an impact, there is a real risk that if we fail to engage consumers with the need to save, when contributions increase next year, many will opt out.

“The onus is on providers, employers and government to do more to help people understand their money.”