An insurance provider has called on the government to take action on pensions after research revealed that nearly a third of all people planning to retire in 2010 will end up living below the poverty line.
According to the Joseph Rowntree Foundation, a single person in the UK needs to earn at least £13,900 each year before tax to afford a basic but acceptable standard of living. But a study entitled ‘Class of 2010’ undertaken by the Prudential indicated that women’s mean expected retirement income was £12,169 per annum or 12% below this level, while men’s was £19,593 or 41% above it.
As a result, a huge 32% of people who planned to retire this year would have to try and make ends meet on an income below the poverty line, with women more likely to end up in this situation than men.
Some 35% of females are expected to obtain pension pay-outs of £14,000 per year or less, with the figure dropping to about 29% for males. The gender gap becomes even more marked for those over the age of 65, however, where a huge 42% of women will receive incomes that are below the poverty line compared with 33% of men.
Vince Smith-Hughes, Prudential’s head of business development for pensions, 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.”
As a result, he called on the government to work with the industry to encourage people to save, regardless of their gender.
Research published by the organisation earlier in the year showed that, while 47% of people believed they were financially well-prepared for retirement, there was a huge gap between perception and reality, Smith-Hughes added.