Prudential reveals women can expect £42bn pensions shortfall
on: April 21, 2009, 5:02 am
Author: Jonathan Akerman
to new figures from the Prudential Class of 2009 retirement survey,
UK women who plan to retire in 2009 can each expect to receive
£6,642 a year less in their annual pensions than men, equivalent
to a total income shortfall of more than £42 billion.
2.76 million women planning to retire in 2009 can expect to receive
an average annual
pension of just £13,671, while the 3.95 million men
who plan to retire in 2009 will get £6,642 more, expecting
an average pension of £20,313.
still a shock to see so many women retiring at such a disadvantage
to their male colleagues, despite all we know about the causes
of pension discrepancies between men and women," said Karin
Business Director at Prudential.
gender gap has become so firmly established because women have
historically earned less than men, and still earn around 17% less.
When women have children, their pension contributions reduce significantly
or stop altogether, and their state pensions often take a hit
underlying problem that many people have insufficient pensions
is never going to go away unless men and women start their pension
plan much earlier in life, ideally in their twenties or thirties,"
Karin added. "Starting a pension at an early age will lessen
the impact in later life of many women's decision to take a career
break to have children. It will also mean people can feel confident
that they are going to have enough money to live off when they
do come to retire, and this is vitally important for women who
expect to receive smaller pensions than men."
major cause of pensions gender gap is that many women take a career
break to have children, but it is possible to protect future pensions
and maintain a pension during this time. Women could also consider
trying to keep up any company pensions
or private pension contributions even if they are on maternity
leave or an extended career.
Neglecting pension savings
- As many as 61% of retiring people doubt their pension and other
savings will provide a sufficient income to enable them to enjoy
a comfortable life in retirement.
- A rule of thumb is for people to try and save half of their
age as a percentage of their salary into a pension scheme, for
example 12.5% at age 25 and so on.
taking advantage of company schemes
- Many employers offer pension schemes and agree to match any
contributions made by employees. People should enquire about the
pensions scheme offered by their employers.
- People in retirement have a wide choice of annuities available
to them and it is recommended that they shop around for the product
which is most suitable for their needs.
The information contained in Prudential UK's press releases is
intended solely for journalists and should not be used by consumers
to make financial decisions. Full consumer product information
can be found at www.pru.co.uk.
conducted online by Research Plus among 1,000 UK adults aged 45+
between 10-18 November 2008. Figures based on Office of National
Statistics 2007 which show 24,990,500 adults aged 45+ in the UK.
For further information please contact the Prudential media department.
"Prudential" is a trading name of The Prudential Assurance
Company Limited, which is registered in England and Wales. This
name is also used by other companies within the Prudential Group,
which between them provide a range of financial products including
life assurance, pensions, savings and investment products. Registered
Office at Laurence Pountney Hill, London EC4R 0HH. Registered
number 15454. Authorised and regulated by the Financial Services
3 Sheldon Square
020 7150 3177