Lower levels of retirement savings and less access to guaranteed income sources are the biggest challenges faced by most UK women in retirement, according to research from Fidelity Worldwide Investment.
The firm found that almost a quarter of women (24%) were reliant on their state pension, compared to only 6% of men.
Women were less likely to have a significant final salary scheme, at 51% compared to 67% of men, and only 27% had a defined contribution pension pot, compared to 35% of men.
Fidelity says that the findings of the survey suggest women who are completely reliant on their state pension in retirement will suffer a shortfall, based on estimates that the average woman requires £709 (€1,001) a month just to cover basic essential expenses.
Overall, the average woman’s retirement savings pot stands at only £35,000 - nearly two-thirds smaller than a man’s at £87,000 - leading 13% of women to plan for ongoing employment past retirement age, to boost their savings and income.
A further problem is that most women are dependent on cash savings, with 66% preferring bank savings accounts and 76% using cash ISAs to supplement their retirement funds. This makes them more vulnerable to inflation eroding their savings over time.
Maike Currie, associate investment director at Fidelity Worldwide Investment, says: “The gender pension gap is well documented with women having always trailed behind men when it comes to pension savings due to historical differences in working patterns.
“The basis of good pension planning is to ensure that your essential expenses are covered with secured income in retirement. It is, therefore, vitally important to assess your key outgoings and get a forecast from the Department for Work and Pensions on your state pension entitlement.”
The research was carried out in May amongst 1,014 UK adults aged 55+ who plan to retire in the next 12 months to five years, or who have retired in the past 12 months to five years, with a private pension on top of a state pension.
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