Women approaching retirement are on course to receive an average of just £12,000 a year after paying income tax and housing costs, compared to an average of £17,000 for men.
The pension gap between men and women has fallen from 52 percent for the 50 to 64 age group since 2008, but is still substantial at 33 percent, according to a report by pension company Scottish Widows.
If progress continues at this pace, it will take another 20 years before women can retire with the same annual income as men, the report warns.
Inequality: The gender pension gap has fallen from 52% for the 50-64 age group since 2008, but is still substantial at 33%, according to a report from pension company Scottish Widows
Women’s lower pension income means millions will fall short of the £14,400 the Pensions and Lifetime Savings Association (PLSA) says is needed for a minimum standard of living in retirement.
At this level of income, someone could afford a week’s British holiday every year, £50 a week for groceries and up to £630 a year for clothes and shoes.
As many as 42 percent of women are at risk of falling into poverty when they retire, compared to 35 percent of men.
Women are also much less likely to move toward a comfortable lifestyle – 28 percent compared to 35 percent of men.
A comfortable retirement costs around £43,100 a year, according to the PLSA, and will provide £70 a week on groceries, as well as £100 a month on eating out, a three-year-old small car and a fortnight’s four-star holiday in the Med.
Scottish Widows suggests that couples should be able to build collective pension savings in a ‘family pension plan’ to help close the gap.
Jackie Leiper, chief executive of Scottish Widows, said: ‘The pace of change must accelerate – we simply cannot sit back and wait another 20 years. Without further action, the gender pension gap will never be closed.”