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Pension saving is an endeavour which is often embarked upon years before a person actually chooses to retire. Retirement can prove costly, and with no income through a regular salary, building up a pension pot is often seen as a key to ensuring comfort. While the State Pension offered by the government is viewed as valuable, many people are choosing alternative methods to ensure they have enough.
However, new research has found women are likely to be missing out when it comes to leaving the workplace for their later years.
Analysis undertaken by equity release lender more2life has shown men anticipate they will have an annual retirement income of £19,748, but women suggest their income will be £14,833 in later life.
When average life expectancy is taken into account, then, the basic ‘gender pensions gap’ could be as high as £108,130.
This is a staggering difference which is likely to affect the retirement goals and aspirations of women once they leave the workforce.
The issue only increases when taking into account different groups of women.
The firm found this amount rises to £186,120 for women who are married or in a relationship, with men anticipating they will receive £8,460 more annually than their partners when retiring.
When it comes to different methods of pension saving, there are also disparities to be noted.
While the majority of men and women rely on the State Pension, men are more likely to depend on private sources of pension income than their counterparts.
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Close to half of men stated their income is derived from a workplace pension – either final salary or defined benefit – when compared to one in three women.
The survey from more2life was carried out in May and received 1,029 responses from Britons aged 54 and over.
Dave Harris, Chief Executive Officer at more2life, commented on the findings of the report.
He said: “Today’s findings put a price tag on gender and suggest that while women may live longer, their financial circumstances often mean that this needs to be done on a more frugal basis than their male counterparts.
“This stark difference highlights not only the need to address the root causes of financial gender inequality but the need to better support women both in the lead up to and during later life.
“Part of that is encouraging them to think carefully about how they will fund their retirement using all of their available assets including their housing wealth.”
Mr Harris urged the government and industries to encourage people to engage with planning for their retirement in the long term.
He said that while State Pension engagement was often good for both genders, further understanding and insight was clearly necessary when it comes to alternative retirement income sources.
He concluded: “Nowadays, people approaching later life often need to fund a longer and more active retirement than their parents but with smaller pensions.
“As such, it’s crucial for current and future retirees to consider how assets such as property could help them form a more holistic plan for their later years.
“Equity release, for example, has proven to be a popular solution among older homeowners looking to make use of their property wealth to fund their retirement, and could enable more women to live with financial security and stability in later life.”
Ultimately pension saving can be achieved in a number of ways.
Some may choose to rely upon a workplace arrangement if they are eligible, with auto-enrolment meaning millions have this kind of pension saving at their disposal.
However, others might choose a private pension arrangement, saving personally through a provider.
Britons are, however, urged to take advice about their retirement savings to pick an option which suits them and gives them the best chance of a comfortable retirement.
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