Gender gap widens over expected retirement incomes

On average, women retiring in 2016 expect to have around £14,450 a year to live on - the highest figure for women retiring in any year since Prudential’s annual survey started in 2008.

But while the situation for women is improving, the gender gap is also growing.

The gap between what female and male retirees expect to have as an annual income has increased by £600 over the last year.

This is because while women typically expect to be £150 a year better off than women who retired last year, men expect to be £750 a year better off on average than men who retired in 2015 - a £600 difference between the sexes.

On average, men retiring in 2016 expect to have an annual income of £19,850 to live on - £5,400 more than women retiring this year.

Two-fifths (40%) of women retiring this year expect to have enough income to live comfortably, compared with three-fifths (60%) of men.

Despite the boost to men’s retirement incomes, men retiring this year do not expect to have as much annual income as those retiring in 2008 and 2009, when the average man retiring in those years expected to have over £20,000.

The retirement incomes people expect to have are made up of the annual amounts they expect to get from savings, the state pension, private pensions and any other investments such as property.

Prudential surveyed 1,000 people planning to retire in 2016 for the latest study.

Huge changes have taken place in recent years to pension saving and retirement.

Workers are gradually being automatically enrolled into pensions, amid efforts to encourage more people to save more money for their retirement.

In 2015, new pension freedoms were introduced to give people aged over 55 more flexibility over how they use their pension pot.

The freedoms mean people are no longer required to buy a retirement income called an annuity with their pension pot.

There have been signs of annuity rates plummeting recently amid the market turmoil following the referendum vote to leave the EU.