Women giving up work this year expect to settle for a retirement income of a quarter less than men, according to new research.
The pension income ‘gender gap’ is an average of £92 a week or £4,800 a year, says financial giant Prudential, which carried out the survey.
Women will pick up an average £14,300 a year in retirement, while men will collect around £19,100.
Despite the discrepancy between retirement income for men and women, the firm says the good news is the pension gender gap is at the narrowest recorded in eight years of research.
Another bonus is women are posting the highest amount of retirement income ever as well – with a 17% improvement over the income expected by last year’s women retirees.
In comparison, the amount expected by men remains the same – with a difference of just 1%.
Retirement income peaks
The study found that most women are pleased with their retirement income. Around 45% feel they will have a financially comfortable retirement, while 50% consider they are well-prepared to give up work.
The survey includes the state, private and workplace pensions.
The average pension for this year’s retirees is £17,000 – £1,200 higher than the average expected income last year and the highest figure for six years.
The increase is mainly due to rises in the value of shares on the London Stock Exchange as the economy has recovered in recent years.
Michelle Cracknell, chief executive of The Pensions Advisory Service, said: “It can only be good that the pension gender gap is shrinking for retiring women and the future looks good as well as changing work patterns gradually take effect and provide women with better pay and pensions.
Flat rate pension fear
“We still have some important issues to deal with, like recognising women lose out on pensions because of career breaks to bring up families, lower pay and having to hold down more than one part time job to help ends meet.
“These all make a difference to the amount of money they can put aside for a pension compared to men who do not have to face these problems.”
One factor that may impact on women’s pensions in the coming year is the change to flat rate state pensions coming in April 2016.
The transition means thousands of women will miss out on the full state pension, which will undoubtedly affect their average retirement income.