Women retiring this year will have a third less than men in their pension pots, as pension savings hit a five-year low

Women retiring this year expect their annual retirement income to be a third lower than that of their male counterparts – resulting in a gender gap of £5,750 - new research from Prudential has shown.



A typical annual income of £12,250 is what women retiring this year expect, compared with an average £18,000-a-year for a man retiring in 2012.



But the good news for women is that the pension gender gap has shrunk significantly since 2009 when it was £6,642, and is down from last year’s £6,500.

Gender gap: women still have a third less to retire on than men

The study, which included more than 1,000 people planning to retire this year, found that the closing gap was more a result of male incomes falling than women boosting their pension savings.



The retirement gender gap is widest in the South East according to the survey, where women retiring this year expect to have £7,878 less income a year on average than men - £12,259 compared with £20,137.



It’s in the North West where women fare the best against their male counterparts retiring on an average of £13,087 a year, compared with £15,632 for men - a difference of £2,545.



Women in Northern Ireland are expecting to retire on the least of any region, with an average income of just £9,375 while those in London can look forward to a considerably higher £15,436.



But retirement savings for both sexes are suffering according to Prudential, who say the typical sum that men and women expect to retire on in 2012 including their private, company and state pensions has reached a five-year low of £15,500 annually, compared with £16,600 in 2011.





Vince Smith-Hughes, Prudential's retirement income expert, said: ‘Not only does the gap remain stubbornly wide, but anticipated retirement incomes have this year hit a five year low for both men and women.



‘It is imperative for anyone looking to secure a sufficient income when they retire to begin saving as much as they can, as early as they can. For those who are still working, it has never been a more important time to save into a pension.’



Low interest rates and quantitative easing (QE) have particularly hit annuity rates, leaving more than million pensioners severely out of pocket.



Analysts have found that a 65-year-old man with £100,000 could have bought a level income of £7,855 in July 2008, but someone in the same situation this year would only receive an income of £5,923, a drop of almost 25 per cent.