The gender pensions gap for people aged over 55 in the UK has widened yet again.
Research by equity release lender more2life and the Centre for Economics and Business Research (Cebr) revealed that women are missing out on £183,936 ($251,170, €213,183) compared to men in retirement.
This is despite contributing a larger percentage of their income to their pension pots – 9.4% for women and 8.3% for men.
Additionally, the gap between men and women has risen by £26,673 since last year, highlighting how the outbreak of covid impacted retirement savings for women over 55.
Men anticipate an annual retirement income of £20,712 compared with £14,964 for women, more2life and Cebr found.
Despite contributing a smaller portion of their income, men are still able to put aside more for retirement, based on average earnings for 2020.
On average, men tend to contribute around £3,184, while women save £2,340 in their pension pots, meaning that they would need to work for an additional 14.5 years to catch up.
Dave Harris, chief executive of more2life, said: “Although women appear to be better at saving into their pension, they still face a retirement that is less comfortable and financially secure than their male counterparts.
“The stark difference in retirement incomes highlights the need to address the root causes of financial gender inequality and better support women as they make choices around how to use their assets both in the lead up to and during retirement.
“It’s clear that the covid-19 pandemic has caused significant disruption to many people’s retirement savings, but the impact has been most acutely felt among older women. As we begin to think about what a post-covid society looks like, it’s vital that the industry and government does more to encourage women to engage with long-term financial planning.
“Raising awareness of alternative retirement income sources, such as property wealth, is crucial in ensuring current and future retirees can enjoy the retirements they deserve.”
‘Not too late’
Hargreaves Lansdown’s research also backs up more2life’s findings.
Senior pensions and retirement analyst Helen Morrissey said that the investment platform found 62% of women are worried about being able to afford to pay enough into their pension as a result of the pandemic, compared with 57% of men.
But there are still steps women can take to fill the gap.
Morrissey added: “It’s not too late to make a difference to your pension value by continuing to contribute after the age of 55. You should also check with your employer to see if they will match any further contributions as this can give your retirement planning a real boost.
“State pension and benefits also form an important part of your retirement income and so you should check what you are entitled to and whether there are any gaps that need to be filled.”