British men are receiving approximately £29,000 ($40,500) more from their state pension than British women are over the course of a 20-year retirement, according to research by UK consumer advocate group Which.
After analyzing the most recent data from the UK’s Department for Work & Pensions (DWP), the group found that the average man receives £153.86 a week from his state pension, while the average woman takes home £125.98 a week. However, the gap has closed slightly—in August 2017, the average payment received by women was 81.9% of that received by men, which was up from 79.7% in August 2015, and 77.7% in August 2013.
A DWP spokesperson told Which that the new state pension is reducing the gender gap even further, saying that some 650,000 women reaching state pension age in the first 10 years will receive an average of £8 per week more (in 2015-16 earnings terms), due to the new state pension valuation of their National Insurance record.
According to Which, there are 12.9 million people currently receiving a state pension, which is approximately 25% of the UK’s adult population. The main group of state pensioners is the 8.4 million people who receive basic and additional pension based solely on their own National Insurance (NI) contributions. The group is 59% male and 41% female, with an average weekly payout of £142.22. The report found that in many cases, women in the main group will have a lower pension because they may have taken a break from their career to have children.
The report also identified that retirees collecting the state pension under the old system, which existed until April 2016, could be worse off compared with new recipients. Retirees who have qualified since the new system was introduced receive an average of £150.35 per week, compared with £137.81 under the old one. This works out to be a difference of £13,041 over a 20-year retirement, and just one in five recipients of the new state pension are women.
“Many pensioners will be shocked by the differences in average payouts to men and women and those qualifying under the old and new systems,” Harry Rose, an editor at Which, said in a release. “Some pay gaps will close eventually, but not soon enough for some.”
The report pointed out steps people can take to put themselves in a stronger position, such as planning their retirement budgets in advance, and taking advantage of the forthcoming pensions dashboard. The dashboard, an online tool expected to launch in 2019, will help people track how much they have saved in their private and workplace pensions.
“But the DWP must also play its part,” said Rose, “by ensuring it provides accurate forecasts that are easily accessible.”
Tags: Department for Work and Pensions, Gender Gap, Pension, UK