Women retiring in 2015 expect a retirement income 25% lower than men, according to the Prudential’s annual ‘Class of’ research. However, the research also reports that the retirement income gender gap is at its lowest since 2009, when Prudential first started tracking the difference between male and female retirement income expectations as part of its ‘Class of’ research. Women appear to be increasingly optimistic about their finances in retirement.
The insurer’s annual ‘Class of’ research, which tracks the future financial plans and aspirations of people planning to retire in the year ahead, is now into its eighth year and has highlighted a retirement income gender gap of £4,800 for the ‘Class of 2015’. Women planning to retire this year have, on average, an expected retirement income of £14,300 compared with £19,100 for men. This year’s female retirees have the highest average expected annual retirement income ever recorded by Prudential’s research, and expect to be nearly 17% better off than those who planned to retire last year. By contrast, men’s expected retirement income expectations have increased by just 1% since last year.
The rise in women’s expected incomes is reflected in their increasing optimism about retirement – more than two-fifths of women (44%) believe their pension will provide for a comfortable retirement compared with just 29% in 2014. Meanwhile, 50% of women feel financially well-prepared for retirement compared with just 41% in 2014.
Prudential’s Class of 2015 research previously found the average expected annual retirement income for all retirees in 2015 has reached a six-year high of £17,000, including income from private, company and state pensions. This is £1,200 higher than the average expected income of 2014, pointing towards the fact that the UK as a whole seems to be starting to save more and more.