Women Set For Retirement In Poverty
By Alison Steed
A THIRD of women retiring this year face a retirement in poverty with an income of less than £14,000 a year.
The minimum amount a single person can live on with a reasonable standard of living is £13,900 according to the Joseph Rowntree Foundation, but women will have a typical expected income of £12,169 according to insurance giant Prudential.
The findings prove that women need to take more interest in their pensions and retirement planning.
Vince Smith-Hughes, Prudential's head of business development for pensions, said: “Women are more likely to take a career break when they start a family and possibly the last thing on your mind when you're taking care of children and the home is how you're going to fund your retirement years. But as these figures clearly demonstrate those years out of work do have an impact," he said.
"Evidently there is a vast difference between men's and women's anticipated retirement income and we believe government and the retirement savings industry can do more to encourage men and women to save more into pensions," said Vince Smith-Hughes.
Prudential found earlier this year that 47 per cent of people believe they are financially well prepared for retirement, but the difference between perception and reality is vast.
Mr Smith-Hughes added: "Clearly there is a discrepancy between what people believe constitutes being financially well prepared for retirement and the actual income required to ensure that you are. This is not something that you should begin thinking about the year you retire, it takes time to plan for retirement and to work out what the best way of utilising your funds is so that you have the income that you want and, more importantly, the income that you need for as long as you need it.
"People should seek advice early to make sure they are well prepared for a retirement, which could easily last for 20 years plus."
The differences across the regions are stark, with the South West being particularly hard hit.
| Region | Percentage of people retiring on less than £14,000 a year |
| South West | 42% |
| Yorks/Humbs | 39% |
| Scotland | 35% |
| West Midlands | 33% |
| North West | 32% |
| National average | 32% |
| London |
31% |
| North East | 30% |
| East Midlands | 29% |
| South East | 28% |
| Wales | 27% |
| Eastern | 26% |
Source: Prudential
