Released on: June 22, 2010, 6:24 am
Author: Prudential
Industry:
Financial
Prudential has revealed new research that shows more than a third of women (35 per cent) planning to retire in 2010 will receive an income which is below the poverty line* - £14,000 a year or less - according to the latest findings** from Prudential's Class of 2010 retirement survey.
By comparison 29 per cent of men will face their retirement on an income of less than £14,000 a year.
The gender gap becomes even starker over the age of 65 where 42 per cent of women over 65 will have incomes below the poverty line compared with 33 per cent of men. According to the Joseph Rowntree Foundation, a single person in Britain needs to earn at least £13,900 a year before tax** in order to afford a basic, but acceptable standard of living.
Overall nearly a third (32 per cent) of people planning to retire in 2010 will have an income that falls below the poverty line.
Prudential’s research has also found that women’s mean expected retirement income is£12,169 a year, or 12 per cent below the £13,900 stated by the Joseph Rowntree Foundation, while men expect to receive a mean income of £19,593, or 41 per cent above the poverty line.
The findings reinforce the need for women to take pension savings and retirement planning matters into their own hands, according to Vince Smith-Hughes, Prudential’s head of business development for pensions. He said: "Women are more likely to take a career break when they start a family and possibly the last thing on your mind when you’re taking care of children and the home is how you’re going to fund your retirement years. But as these figures clearly demonstrate those years out of work do have an impact."
Ahead of the new coalition government's emergency budget on 22nd June, Prudential has said it is keen to work with government on the issues of saving for retirement and helping and encouraging people to save, regardless of gender.
"Evidently there is a vast difference between men’s and women’s anticipated retirement income and we believe government and the retirement savings industry can do more to encourage men and women to save more into pensions.
"Research published by Prudential earlier this year showed that 47 per cent of people believe they are financially well prepared for retirement, but the difference between perception and reality is vast, " added Vince Smith-Hughes.
"Clearly there is a discrepancy between what people believe constitutes being financially well prepared for retirement and the actual income required to ensure that you are. This is not something that you should begin thinking about the year you retire, it takes time to plan for retirement and to work out what the best way of utilising your funds is so that you have the income that you want and, more importantly, the income that you need for as long as you need it.
“People should seek advice early to make sure they are well prepared for a retirement, which could easily last for 20 years plus.”
Notes to Editors:
The information contained in Prudential UK's press releases is intended solely for
journalists and should not be used by consumers to make financial decisions. Full
consumer product information can be found at pru.co.uk.
Sources
* A single person in Britain needs to earn at least £13,900 a year before tax in
2009, in order to afford a basic but acceptable standard of living, The Joseph
Rowntree Foundation 2009, www.jrf.org.uk/publications/minimum-income-2009
** Survey conducted by Research Plus between 3-10 December 2009 among 6,073 UK
adults aged
45+ using an online methodology.
About Prudential:
"Prudential" is a trading name of The Prudential Assurance Company Limited, which
is registered in England and Wales. This name is also used by other companies within
the Prudential Group, which between them provide a range of financial products
including life assurance, bonds,
pensions, savings and investments and a tax
calculator. Registered Office at Laurence Pountney Hill, London EC4R 0HH. Registered
number 15454. Authorised and regulated by the Financial Services Authority.
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