Women Retire With Half The Pension Pot Men Get

A new report has revealed the scope of the gender disparity in pension savings and income.

Funding retirement remains a significant challenge for many women.

According to the annual State of Retirement report by LV=, women who have occupational or private pensions reach retirement with pots worth on average £107,000.

This is almost half that of men who, on average, retire with a fund worth £201,000.

Nearly a quarter of women approaching retirement are set to rely solely on the state pension, which is currently a maximum of £113.10 per week.

Vanessa Owen, head of product at LV=, told Sky News: "It's actually less about how much people are saving, but the percentage of their income actually means pounds, shillings and pence are less."

She says the current gap is largely down to the fact many more women stayed at home to raise children without returning to work 30 or 40 years ago.

This means that as they reach retirement age now, they have less put away.

Ms Owen said more women now chose to return to work, and do so sooner, meaning when this generation retire, there may be less of a disparity.

The report also shows 4.3 million retirees have some form of debt, either in the form of a mortgage or on credit cards.

However, research from Prudential (HKSE: 2378.HK - news) also shows the pension gender gap is shrinking and is now at its narrowest since 2009.

This year's female retirees have the highest average expected annual retirement income ever recorded by the insurer and are nearly 17% better off than those who planned to retire last year.

Prudential suggests women planning to retire this year have, on average, an expected retirement income of £14,300 compared with £19,100 for men.

Vince Smith-Hughes, a retirement income expert at Prudential, said: "There are a number of steps that both men and women can take to further improve their retirement income prospects, including maintaining pension contributions during career breaks and if possible, making voluntary National Insurance contributions upon returning to work."

This April, the Government's pension reforms come into effect, giving retirees greater freedom as to how they take an income from their savings and how much can be drawn in a lump sum.