Research by pension provider Friends Life has found that women’s expectations of their financial wellbeing in retirement fall significantly short of what they think they will need to provide a comfortable retirement. Whilst both genders see a gap between their hopes and the financial reality, they are facing a shock in retirement; the research suggests that women in particular face the greater challenge. Not only are women expecting to retire eleven months later (at 62 and a half years old) than men, they also anticipate receiving far less (£17,097) in yearly retirement income than men (£21,195), assuming they have no other source of income in retirement.
Women give £25,128 as the annual retirement income that will allow them to live comfortably, a figure which is currently £8,0002 more than their expected income from their pension. Men will also fall short of their desired income (£27,832) but only by £6,6373. Up-to-date figures4show the annual retirement income for single men (£17,992) is 23% greater than single women (£14,664).
David Still, Managing Director, Retirement Income, at Friends Life comments:
“The gulf between what men and women are saving and what they would need to save to give them the income they want is obviously concerning.”
“Whilst initiatives such as auto enrolment are helping to raise awareness of the need for us all to save for our retirement, we must make sure people are engaged and realistic about what they need to save today to achieve their hopes for tomorrow.”
Across the genders, the research established that the average amount people felt they needed to provide a comfortable retirement was £26,339 per year. The research also highlights the gulf between what pension savers hope for in retirement and their retirement reality.
Those approaching retirement can look into whether enhanced annuities, underwritten against a range of individual lifestyle criteria, can help improve their level of retirement income. They should also get advice on the range of options available to them and the best possible deal, given their lifestyle. They may have to pay for this advice.
As published on friendslife.com