Wednesday, January 11, 2017
The Gender Divide in Retirement
According to a British Study called the 2016 Readiness Report, women are still significantly behind men when it comes to being prepared for their retirement. The UK’s average readiness score is currently sitting at 51. However, while men have a readiness score of 54, women have an average readiness score of just 49. On first glance, it might not seem like the gap is as wide as you might expect. Here some information from the report: (for the full report go here Pdf file)
How ready are you for retirement?
Pensions have graced the cover of almost every newspaper in the UK in the past 12 months, and there has certainly been a significant amount of column inches dedicated to the topic. But, the problem remains. Lack of preparation for retirement in women certainly has roots in previous employment patterns and social norms, and women are still more likely to have career breaks than men to care for family. However, there is also a lack of pension awareness across both men and women and a need for change.
Traditionally, women have relied on a spouse to provide for their retirement, but in today’s age of independence and equality, there is a need for women to take responsibility for building up their own pension pot.
People reaching State Pension Age after 5 April 2016, will build up a State Pension based on their own national insurance contribution record, and apart from some complex transitional arrangements, it won’t be possible to inherit a spouse’s pension. It is increasingly important that both government and industry make a concerted effort to further encourage women to plan for life after work. Currently, women on average tend to live 3.7 years longer than men and they will need to make sure they have an adequate retirement income to live on.
The Readiness report research shows that women typically aim to retire aged 64, which is problematic given that by 2020, the state pension age for women will have risen to 66, if they don’t have private pension savings to fill the gap.