Retired women in Scotland get 1/3 less than men

While the gap between men and women’s retirement incomes is narrowing, this is more a result of male incomes falling than women boosting their pension funds, the study has found.

Average pensions for both men and women have fallen every year for the past five years according to the research from the Prudential.

The typical sum that men and women expect to retire on in 2012 including their private, company and state pensions has reached a five-year low of £15,500 annually, compared with £16,600 in 2011, Prudential said.

In Scotland the average amount that men and women expect to retire on is more than £1,000 a year lower than the UK average – with an average of £14,150 a year expected by men and women north of the Border.

The retirement income gender gap in Scotland is among the widest in the country, according to the survey of more than 1,000 adults.

Vince Smith-Hughes, Prudential’s retirement income expert, said: “The pension gender gap appears to be narrowing, but there is still a long way to go.

“Not only does the gap remain stubbornly wide, but anticipated retirement incomes have this year hit a five-year low for both men and women.

“The practical steps that women can take to improve their retirement income prospects include maintaining pension contributions during career breaks and, if possible, making voluntary National Insurance contributions after returning to work.”In the UK as a whole the average pension for men is £18,000 a year while the average for women is £12,250 – a difference of £5,750.

The typical gender gap has been narrowing since 2010, when it stood at £7,400, something which the study said was mainly due to falls in male incomes.

Men retiring two years ago had an expected annual income of £19,600, while women were retiring on around £12,200 a year.

Nearly half (49 per cent) of women surveyed believe they will not have enough income for a comfortable retirement, compared with 40 per cent of men.

When they retire, workers use their pension to buy an annuity from an insurer, a decision which sets the size of their pension for life.

Analysts have found that a 65-year-old man with £100,000 could have bought a level income of £7,855 in July 2008, but someone in the same situation this year would only receive an income of £5,923, a drop of just under 25 per cent.

Dr Ros Altmann, director general of Saga, said the fall in the value of pensions was “a matter of significant concern”.

She said older people spent more money on things such as food and fuel – which meant they would be more seriously hit by inflation at a time when their incomes were falling.

“The government is not taking seriously the lot of older people in the UK whose quality of life has been seriously affected by government policies such as quantitative easing.

“Current policy seems to lump all pensioners together and assume that they all have big houses and lots of money – but that is just a minority.

“Unfortunately many people were planning to live on their savings.”