Women face £29,000 pensions pay gap

Women face a potential pensions pay gap of almost £29,000, according to new research from consumer group Which?.

Its study shows that the average man stands to earn £153.86 in retirement, while the average woman will receive just £125.98.

This represents an overall percentage improvement – 81.9 per cent compared to 77.7 per cent in 2013 – but highlights the desperate need for women to plan their retirement budgets early.

The state pension is allocated based on an individual’s national insurance (NI) contribution record. The consumer group said around 59 per cent of the 13 million people currently receiving the full and additional state pension are male. This is because women are more likely to take a break from their career to have children, therefore not fulfilling their NI contribution quota to receive the full state pension.

Harry Rose, Money editor at Which?, said: “Many pensioners will be shocked by the differences in average payouts to men and women and those qualifying under the old and new systems. Some pay gaps will close eventually, but not soon enough for some.

“There are steps people can take to put themselves in a stronger position, for instance by planning their retirement budgets in advance and taking advantage of the forthcoming pensions dashboard. But the DWP must also play its part by ensuring it provides accurate forecasts that are easily accessible.”