Recent research from MGM Advantage, the retirement income specialist, reveals alarming disparities between the retirement finances of men and women. Although, on average, people in retirement feel that they need an additional £130 per week on top of their current income to be financially comfortable, women’s financial position in retirement is already more austere than that of men and their outlook seems to be much more prudent.
The research, carried out among retired people in the UK, shows that men’s claimed average income in retirement is some 68% greater than that of women (£377 per week compared to £225). When asked how much more money they would need in order to feel financially comfortable, women wanted an additional £117 per week on average, compared to £141 for men. As such, a comfortable retirement for men requires an estimated income of £518 per week (approx. £27,000 pa), but just £342 (approx. £18,000 pa) for women – a significant difference of £9,000 pa.
Andrew Tully, Pensions Technical Director, MGM Advantage said:
‘‘Income inequality persists into retirement for a large number of women in the UK. The levels of inequality are not limited to just a few pounds – they are significant and will drastically affect the lifestyles men and women experience in retirement. The root cause of this is almost certainly inequality of earnings in the workplace, a factor that leads to lower pension contributions and therefore lower retirement incomes. However, what is really notable is how much this is tainting women’s perception of what a comfortable level of income looks like.
Our research shows that women would feel comfortable on an income that’s £9,000 less than men’s deemed level of comfort. In fact, on average, men are actually already receiving a level of income that exceeds the amount women aspire to in order to be comfortable. This is creating a dual class of people in retirement. We believe that satisfaction is being met at a lower level because of women’s starting point. They are accustomed to lower income and therefore live more prudently, and as a consequence they have a lower level of perception when it comes to comfort. It’s a case of not so great expectations.’’
MGM Advantage’s research also revealed regional differences when it came to how much money was needed to feel comfortable in retirement. On average, men and women in London and Eastern England felt that they needed the most extra money (£178 and £171 per week respectively), whereas those in Yorkshire and Humberside felt they needed just £82 extra per week