29 Oct 2019
Retirement Income Gap of 57% for UK Women
A new study has revealed that the retirement income of women in the UK is less than half of that received by men.
It has been revealed this week that the gender pay gap is closing at a “dismally slow” rate, and data shows that disparity is also evident after retirement. Last year, retired women received, on average, just £12 a week from their investments (including interest, dividends, capital gains and other assets). Whereas men in the same group received £28 a week.
Figures from finance firm Salisbury House Wealth also show that personal pensions also follow a similar pattern. Where men receive £19 per week, women are receiving just £5.
However, while inequality in pay is playing a part in the retirement income gap, it isn’t the only reason men are receiving significantly more from their pensions. Studies have shown that women are less likely to take risks with their finances, instead opting for simple and ‘safe’ investments.
Salisbury House Wealth’s managing director, Tim Holmes commented:
“Here is yet another example of how entrenched the gender income gap is in retirement – this needs to change.
“Unfortunately, some advisers have a tendency to assume women are more risk adverse and advise lower-risk lower-return investments as a result.”
Awareness and education could also be playing a part in the retirement income gap, as nearly two thirds of women don’t know about all of the options available to them. However, there are steps women can take, according to Holmes:
“Investing more in assets with higher risk-adjusted returns, such as equities, from an early stage could help.
“When saving for retirement it’s important to save as early as possible – there’s no secret. Working out your savings goals and investing accordingly is also important.”
Despite the discouraging data, there is some positive news. The Department for Work and Pensions released figures this week, showing that the number of men and women who are currently contributing to a workplace pension is equal. Overall, more workers are signing up, even those who don’t automatically qualify.