Gender pension gap widens to over £180,000 among over 55s

By factoring in life expectancy, the gender pensions gap could reach £183,936

The gender pension gap has widened to more than £180,000 among people over 55, according to research from the Centre for Economics and Business Research (CEBR).

While men are anticipating an annual retirement income of £20,712, women expect their income to be £14,964 in later life.

By factoring in life expectancy, the gender pensions gap could reach £183,936.

This is despite the fact that women contribute more into their pension pots than men.

Women put 9.4% of their income into their pension pot compared with 8.3% put by men. This is due to the difference in average earnings of each gender in 2020. Men are able to contribute £3,184 to their pension pot, whereas women can only afford £2,340.

This leaves the average woman needing to work an additional 14.5 years to catch up.

More2life chief executive officer Dave Harris: 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, he said.

More2life led a similar research last year that showed that the pension gap was of £157,263.

CEBR suggested that the pandemic and its impacts are likely to have widened the gap on pension pots’ value.

In addition to this, these factors have also impacted on the ability of over-55s to save into their pension pots.

The research also reveals that 30% of women found their financial situation to have worsened since the start of the pandemic, while a quarter of men made a similar statement.

The disparity in the proportion could be attributed to women being more likely to work in sectors particularly hit by the pandemic. As a result, more women have been made redundant or furloughed compared to their male counterparts.

There was consistently a greater number of women furloughed between July and December 2020, figures from HMRC showed.

According to data for average retirement income for men and women by the number of years worked shows 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 the highest average annual retirement income of £22,776, while their female counterparts receive £17,004.

The widest discrepancy in retirement incomes between genders comes for those who have worked for more than 50 years.

Of these individuals, men received £19,404 in retirement income, where as women only received £11,592.