Women get 40 per cent less than men in retirement

Women get 40 per cent less than men in retirement

Women can expect to receive 40 per cent less than men in retirement, with a pensions pay gulf twice as large as the wage gap leaving many facing poverty in their older years.

The older life expectancy for women, more part-time work and career breaks to care for family mean that the gender pay gap for the workforce of around 18 per cent widens to 39.5 per cent when it comes to average retirement income in the UK.

Nations such as Denmark, Lithuania and the Czech Republic are closer to pension equality, a study by pensions consultancy Mercer found.

Despite the stark shortfall for women workers, the research found that fewer than three in 10 organisations offer savings schemes that are tailored to different working patterns, such as part-time or job-share. Just one in 10 cater specifically to women’s retirements needs.

“Not only an urgent challenge for governments and policy makers, the pensions gap should also be front of employers’ minds,” said Mandy Schreuder, diversity and inclusion consultant at Mercer.

“Women live longer, but with lower levels of savings they face a higher risk of retiring into poverty than their male counterparts.” The research also found that women were far less likely than men to put their private pension savings into aggressive investments, preferring to play it safe and generate lower returns.

State pension pain

Lower income from private pensions means that changes to the state retirement rules risk having a disproportionate effect on women.

The Women Against State Pension Inequality (Waspi) campaign has lobbied against reforms that added 18 months to the retirement age of 2.6 million women.

The Labour manifesto has pledged to ease the effects of pension reform on women born in the 1950s, who have borne the brunt of previous changes, while leaving the retirement age at 66.

The Conservatives have focused more on closing the gender pay gap in the workplace. However, the funding crunch for Britain’s ageing population has prompted some experts to call for faster increases to the retirement age.

John Cridland, the former director-general of the CBI, recently published an independent paper recommending that the retirement age should rise from 67 to 68 by 2039, seven years earlier than the current plans.

Original Source – Marion Dakers, iNews – https://inews.co.uk/essentials/news/business/women-get-40-per-cent-less-men-retirement/

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