Women face £8k retirement shortfall
Women not saving enough for retirement.
Women face a financial shortfall of nearly £8,000 a year compared to men.
That's according to a new study from Friends Life, which has been exclusively shared with lovemoney.com.
The research found that women thought that they would need an income of £24,068 per year for retirement. However, they only expect to receive an income of £16,242 based on their current saving habits, leaving a shortage of a whopping £7,826.
When it comes to addressing that shortfall, things don't look too good either. Less than half (47%) of women have a pension, which is 12% less than men.
And even if they did have a pension, they might struggle to contribute to it. The salary gap between the genders has grown to 19.1% from 18.6% last year, meaning women have less money which they can put into retirement pots than men. Almost half (47%) of women say they have other financial priorities which are preventing them from planning for retirement too.
Men responding to the survey said they would like to have an average of £25,086 a year once they stop working. With an expected income of £20,014, this is only a £5,072 shortfall, making them £2,754 a year better off than women.
Andy Briggs, group chief executive at Friends Life, said that too many women are putting pension provision at the back of their mind. He added: "It is easy to think of retirement as a less than immediate priority, but the sooner they act, the sooner they will secure their financial future."
Make sure you have enough for retirement
No matter your gender, you need to get on top of saving for your later years.
Be sure to read our guide on how to work out how much your need to save for retirement.
Take a look at investment opportunities in our new investment centre (capital at risk)
More on pensions:
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Comments
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I am over 60 and, in the past, was prevented for paying into a pension because I had several part-time jobs adding up to full-time work in the education sector. My shortfall is enormous and I was not able to do much about it - I did what I could at the time. Rules have now changed but it is important for any part-time workers now to ensure they are able to pay into pension plans to the best of their ability.
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This article shows two things: (1) that many people's expectations for their retirement income are unrealistic - unless, of course - they are earning well above average in a steady long-term job with a final salary scheme and (2) as Farab states, the sample of people surveyed either has better pension provisioning than average or an optimistic view of their retirement income. However, all is not lost - it may be worth reviving Neil Faulkner's excellent articles from a few years back about how much you really need to retire on - I seem to recall that it's often less than you think.
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Are those amounts net or gross?
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17 January 2015