Prudential research shows gender pay gap extends to pensions

Wednesday, 07 November 2012 03:42

New figures reveal that top female executives earn around £420,000 less than their male counterparts over the course of their careers and a new report from the Prudential shows that the gender gap extends to pension savings too.

Men retiring in 2012 can expect to receive a retirement income almost 50 per cent higher than women.

Prudential’s Class of 2012 study shows that the average female retiring this year can expect to receive annual retirement income of £12,250 compared to £18,000 for men, a gap of £5,750.

The gender gap in retirement income is narrowing, but only slowly. Prudential revealed that it was £6,642 in 2009 when they first measured it.

Prudential’s survey revealed that just 31 per cent of women planning to retire in 2012 expect to have enough income to be able to live comfortably in retirement. Prudential says this is partly due to previous rigid rules regarding saving for a state pension that penalised women who stayed at home bringing up a family and partly because the older generation of women tended to rely on their husbands’ pensions.

Prudential wants to encourage women to find out more about what level of state pension they can expect to receive to ensure they qualify in full and to find out whether it is advantageous to top up National Insurance contributions to ensure that they qualify for the full state pension.

Prudential is also advising woman aged over 55 to consult their local advisory service to find out if they are entitled to any other benefits.  

Deirdre Flood, Prudential’s retirement expert, said: “Recent legislative changes have made the pension system fairer for women. However, many women who are in their fifties will still struggle to qualify for the full Basic State Pension as they have spent much of their working lives earning money under more rigid accrual rules.

“The closure of the pensions gender gap is happening much too slowly and older women continue to be more vulnerable. It’s important that women take control of their finances and take steps to improve their potential retirement pot.”

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