A report has exposed the shocking gap between the average man and woman has to live in retirement
A pensions divide means the average woman has £7,600 a year less to live on in retirement, a report has found.
A combination of a gender pay gap in work and the fact that women are more likely to take time out to do unpaid caring roles means they have typically built just half as much in a workplace or private pension as men.
Trade union body the TUC has marked the ongoing disparity with Gender Pensions Gap Day – the point in the year at which women would stop receiving any form of pension if it was paid out at the same rate as men.
Research by the Prospect union found the retirement income gap between men and women stands at 36.5% – or more than double the average pay different between the sexes when in work.
It comes after Labour last month revived the Pension Commission, which will bring together unions, employers and independent experts to look into the causes of the gap, among other issues.
TUC general secretary Paul Nowak said: “Everyone deserves dignity and security in retirement. But right now, too many retired women have been left without enough to get by.
“We must make sure that these inequalities are addressed for future generations. That’s why reviving the Pensions Commission is a vital step forward.
“We now have a chance to make sure everyone, including women, receive the decent retirement income that all workers need.”
Sue Ferns, Prospect’s senior deputy general secretary, said: “The gender pension gap is very slowly moving in the right direction but without a more concerted effort millions of women will continue to suffer from unequal earnings in retirement for much of the rest of this century.”
The research by Prospect took into accounts retirees’ incomes from any occupational pension they have – whether defined benefit or defined contribution – plus another private pension they might have, in addition to the state pension.
It does not include any other income they may receive, including other state benefits. It found the average male pensioner gets £402.32 a week, or £20,920.64 a year, compared with a typical female pensioner on £255.52 per week, or £13,287.09 a year.
How to boost your pension income
Find and reclaim lost pensions
If you’ve moved jobs – especially early on – there is a chance you’ve lost track of a pension you were paying into. That’s especially true if you didn’t update your contact details. More than £30billion worth of retirement pots are thought to have gone astray this way. You can use the government’s free pension tracing service to try to find them.
Check if your employer will pay more into your pension
If you have an employer, check if they offer contribution matching. This means they’ll also pay more into your pension if you do, up to a certain limit – like 10% of your pay.
Check if you can boost your state pension
The amount of state pension you get depends on how many years of national insurance contributions or credits you have when you reach your state pension age. You usually earn these automatically if you are employed or receiving certain benefits. You normally need at least 10 qualifying years to get any money and 35 years to get the full amount. If you might not qualify for the full amount, there are ways to increase your state pension – including claiming free credits or paying to fill gaps in your record.
Consider switching providers for lower pension fees
It could be worth switching or combining your pensions into one with lower fees to save money. You can normally do this if you have a defined contribution pension, but not if you have a defined benefit pension, as you don’t pay fees on this type of scheme.