Women’s pensions unlikely to catch men’s, report finds

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Men will continue to have larger pension pots than women, despite retirement inequalities reducing over the last six years, according to a report from the Pensions Policy Institute.

The report says that since 2010, women aged over 50 have experienced greater increases to their retirement incomes than men.

Women in particular have benefited from the introduction of the new state pension, according to the PPI, with the lowest 10 per cent of female earners’ retirement incomes increasing by 41 per cent compared with 20 per cent for men, and the lowest 90 per cent increasing by 19 per cent compared to 7 per cent for men.

The difference in men and women’s average retirement ages also narrowed from 1.9 years to 1.6 years over the period.

However, the report notes that the lowest ten per cent of female earners will miss out on auto-enrolment because their incomes fall below the lower limit.

In total, the PPI predicts 1.6 million pensioner households will stay in relative poverty, among which single women and older couples are more common.

Head of policy research at the PPI Daniela Silcock says: “Reforms such as the new state pension, in particular, are projected to improve incomes for groups who have traditionally had lower retirement incomes, including women.

“Despite these improvements, it is not certain that retirement incomes in the near future will be in line with those for recent retirees. There are clear prospects for average retirement incomes to fall, as people aged 50 and above reach State Pension age. However, automatic enrolment should contribute to reversing this trend over the long term, depending on contribution rates.”

The PPI further estimates that by 2046, the triple lock will have increased spending on state pensions by 2.3 per cent of GDP, only slightly offset by a 0.3 per cent cut due to increasing the state pension age.