- Monday, 09 July 2012
Less than a third of women planning to retire this year aged 55 and over have no form of private pension saving
Women and men will not be equal on State Pension receipt until 2018 at the earliest
Less than a third (31 per cent) of women planning to retire this year aged 55 and over believe they will have enough income to be able to retire in comfort, compared to nearly half (45 per cent) of men. The problem is exacerbated by a legacy of rigid State Pension accrual rules - according to independent Class of 2012 research commissioned on behalf of Prudential.
With time running out, Prudential calls on women over the age of 55 to act now to educate themselves on their projected State Pension entitlement, in order to ensure that they qualify for the full Basic State Pension.
Prudential's Class of 2012 research, into the finances and expectations of those planning to retire this year, highlights that women are more than twice as likely (20 per cent) as men (eight per cent) to rely on the State Pension in retirement.
One fifth (22 per cent) of women has no personal pension, compared with just nine per cent of men.
Furthermore, a third (31 per cent) of women aged 55-plus overestimate the State Pension (£107.45), and 10 per cent do not know how much it is worth, according to Prudential's Class of 2012 study.
A fairer system for women:
Recent State Pension reforms have helped to make significant progress towards a fairer system for women. However, according to the Department of Work and Pensions, one quarter of women retiring this year1 will not qualify for the full Basic State Pension compared with 10 per cent of men and the gap is not expected to close fully until 2018.2
Many women will miss out because the previous system made it harder for carers and those with inconsistent employment histories to accrue benefits.
The research also reveals that women lag behind men in building up State Second Pension credit, despite recent changes designed to boost accrual rates for low earners and carers. When it comes to the State Second Pension, it is projected that women will not match the pensions of men until at least 2040.3
Deirdre Flood, Prudential's retirement expert, said: "Recent legislative changes have made the pension system fairer for women. However, many women who are over the age of 55 will fail to qualify for the full Basic State Pension as they have spent much of their working lives earning money under more rigid accrual rules.
"The closure of the pensions gender gap is happening much too slowly. Women need to take control of their finances. However, there are some steps that they can take to improve their situations in retirement.
"Topping up National Insurance contributions, paying into company pension schemes where possible and consulting a financial adviser about their retirement provision, will all help to ensure a more comfortable retirement.
"Websites like TPAS (www.pensionsadvisoryservice.
The importance of having a retirement and pension plan - 21 June 2013
Savings from new pension savings schemes will not be known until 2014 - 20 September 2012
16 million GB adults have never reviewed their pension plans - 18 September 2012
Pensions action group (PAG) - 30 April 2012