Women approaching retirement are on track to receive an income of just £12,000 a year on average after paying income tax and housing costs, compared with £17,000 on average for men.
The gender pensions gap has fallen from 52 per cent since 2008 for those aged 50-64, but is still substantial at 33 per cent, a report by pension firm Scottish Widows reveals.
If progress continues at this rate, it will take another 20 years for women to retire on the same annual income as men, it warns.
Inequality: The gender pensions gap has fallen from 52% since 2008 for those aged 50-64, but is still substantial at 33%, a report by pension firm Scottish Widows reveals
Women’s lower retirement income means millions will fall short of the £14,400 that industry body the Pensions and Lifetime Savings Association (PLSA) says is needed for a minimum standard of living in retirement.
This level of income would afford someone a week-long UK holiday every year, £50 a week for groceries and up to £630 a year for clothes and shoes.
As many as 42 per cent of women risk facing poverty in retirement, compared with 35 per cent of men.
Women are also much less likely to be on track for a comfortable lifestyle – 28 per cent compared with 35 per cent of men.
A comfortable retirement costs around £43,100 a year, according to the PLSA, and allows for £70 a week on groceries as well as £100 a month on going out for dinner, a three-year-old small car and a fortnight four-star holiday in the Med.
Scottish Widows proposes couples should be able to collectively accumulate retirement savings in a ‘family pension plan’ to help close the gap.
Jackie Leiper, managing director at Scottish Widows, says: ‘The pace of change must quicken – we simply can’t sit back and wait another two decades. Without further action, the gender pensions gap will never close.’