In their latest report, Prudential announced that there is a growing pension gap between men and women. They have suggested that on average a woman entering retirement will have a weekly pension of just £234 or £12,169 a year. On the other hand, men on average have a weekly pension of £377, which equates to around £19,600 a year. This represents a difference of over £7,400 per year or in other words women receive a pension around 62% less a year than men.

To add to a woman’s woes, the research indicates that women’s retirement income is decreasing at a faster pace than men’s in light of the current economic environment. This is almost like a double whammy for women as they struggle with lower rates of pay during there working life and in retirement. According to the National Office of Statistics, as of November 2009, the average weekly wage for men was £643 while it stood at £501 per week for women representing a 28% difference. This is a considerable difference and also helps to explain the pension inequality that we can see. The simple logic is that if women earn less throughout their working lives they will invest less into their pension, which ultimately is reflected in this difference between men and women’s pension income.

However, with a considerable difference between earnings and pensions income between the sexes, one has to wonder what other factors are causing women to have a significantly lower pension income than men. One explanation is that many women may spend a higher proportion of their earnings on other things rather than invest in a pension compared to men. Whatever the explanation it seems fair to say that women may suffer more in retirement as a consequence.