By Simon Mayoh, Financial Planning Consultant, Armstrong Watson LLP

RECENT research suggests the pandemic has further increased the gender pensions gap.

A study by the Centre for Economics and Business Research shows the gender pension gap has widened to more than £180,000 among people over 55.

Some 30 per cent of women, aged 55 and over, said their financial situation had worsened since the start of the pandemic with more women furloughed than men, according to HMRC, which has impeded their capacity to save money for their pension pot. A quarter of men said the public health crisis has impacted their pension savings.

Men are anticipating an annual retirement income of £20,712, whereas women expect their income will be £14,964 in later life.

Considering life expectancy, the gender pensions gap could be as much as £183,936. This is despite the fact that women contribute more to their pension pots in percentage terms than men.

In addition to this, the research found that women have lower incomes in retirement across all lengths of their working life, as men who have worked full-time for 30 to 34 years receive the highest average annual retirement income of £22,776, while their female counterparts receive £17,004.

Women put 9.4 per cent of their income into their pension pot. In comparison, men only use 8.3 per cent of their income for their pension pot. This is due to the difference in the average earnings of each gender in 2020. Men can contribute £3,184 to their pension pot, whereas women can only afford £2,340.

According to the research, this results in the average woman needing to work an additional 14 and a half years to catch up.

The Retirement Living Standards have been developed to help us to picture what kind of lifestyle we could have in retirement at three different levels – minimum, moderate and comfortable - and what goods and services would cost for each level.

A single person will need about £10,200 a year to achieve the minimum living standard, £20,200 for moderate, and £33,000 for a comfortable lifestyle. For couples, it is £15,700, £29,100 and £47,500 respectively.

The current full basic state pension is £9,339 per year. As it is less than the mMinimum lifestyle, saving for the retirement you want is crucial and the earlier you start the more chances you have of achieving the lifestyle you want.

To discuss your retirement plans and how you will achieve your desired level of lifestyle, please contact Simon Mayoh on 0113 2211392 or email simon.mayoh@armstrongwatson.co.uk.