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11 Mar 2015

New Report Reveals The Pension Gender Gap

A new study has discovered that UK women are, on average, retiring on half the amount of savings as their male counterparts, Sky News reports.

Insurance company LV= recently published its State of Retirement report, which found a significant difference between male and female workers in both savings and income, suggesting that funding their retirement remains a key concern for many women.

According to the findings, women in the UK with private or occupational pensions tend to retire with a pension pot of around £107,000; however, men retire with around £201,000 worth of savings.

Furthermore, nearly a quarter of women due to retire soon will only have the state pension of £113.10 per week (maximum) to fall back on.

Speaking to Sky News, LV+´s head of product Vanessa Owen, stated: “It´s actually less about how much people are saving, but the percentage of their income actually means pounds, shillings and pence are less.”

It´s likely that the existing gap is due to the generation of women who predominantly stayed at home to raise their families, and did not return to work after having children. As they approach their retirement now, they have less of their own money set aside.

More women in today´s generation return to work after starting a family, which should lead to less of a disparity when they reach retirement age, Ms Owen predicts.

This is somewhat evident in research by Prudential, which shows that the pension gender gap is actually becoming smaller, and is currently at its lowest point since 2009. In fact, women retiring this year will have on average the largest expected annual retirement income that the insurer has ever noted.

Prudential´s figures show that this year´s female retirees will have a predicted annual income of £14,300, compared to men´s £19,100.

Offering his advice on the issue retirement expert Vince Smith-Hughes suggested that men and women alike take certain steps to improve their retirement prospects; this includes “maintaining pension contributions during career breaks and if possible, making voluntary National Insurance contributions upon returning to work,” he advised.

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