New data shows 1.5 million UK widows (59%) have lost out on pension income after the death of their partner, compared to just 16% of men who reported the same.
Given recent news that the gender pension gap has widened to over £180,000 during the pandemic, this new data provides further scope for comparison between men and women’s retirement incomes in the UK, with key findings including:
- Only a third of women (35%) have independent pension wealth and 40% of women do not have any pension wealth whatsoever
- Two in five (39%) divorced women reported that they would receive lower retirement income following divorce, compared to just one in five (21%) men
- More women (27%) than men (21%) own property wealth, but more men (25%) than women (13%) planned to rely on personal investments for retirement income
New research from leading equity release lender more2life and Cebr today reveals that 1.5 million widows in the UK aged 55 and over say they have lost out on pension income in later life following the death of their partner. Just 16% of widowers say they have experienced the same thing, which is substantially lower than the 59% of widows and demonstrates the disparity between men and women when it comes to later life income.
- 59% of widows said they had been left with less retirement income, compared to just 16% of men who reported the same
- Only a third of women (35%) have independent pension wealth, whilst 40% do not have any pension wealth whatsoever
Impact of divorce on women’s pension income
The research also reveals the impact of divorce on women’s pension income, with two in five (39%) women saying they had lost out on the retirement income they receive or expect to receive because of splitting from their partner. This is compared to the 21% of men who believe their retirement income had been negatively affected by divorce.
Divorced households are also the most likely to see higher outgoings than income every month, with nearly a quarter (23%) of these households saying their expenditure exceeds their income on an occasional or regular basis, highlighting how divorce can affect the affordability of having a comfortable standard of living in later life.
Women have a worrying lack of pension wealth
The data also shows that only a third of women (35%) reported having independent pension wealth, while 17% said they jointly own this with their spouse or partner. Alarmingly, 40% of women reported no pension wealth whatsoever.
When considering the different sources of pension income, nearly half of men (47%) aged 55 and over said they would rely on a defined benefit or final salary pension, compared to just 30% of women. A quarter of men (25%) also said they would rely on personal investments as a source of income in retirement, whereas only 13% of women said the same.
However, interestingly, more women (27%) than men (21%) own property wealth, highlighting the importance of using alternative retirement income sources, such as property wealth, in a holistic financial plan to boost income in later life.
Aside from private and workplace pensions, and cash savings, the overwhelming majority (75%) of over-55’s rely or expect to rely on their state pension in later life as a source of retirement income, and this is similarly felt between men and women. With a 2021 survey conducted by Which? finding that retirees spend an average of £1,085 per month and the UK Basic State Pension only amounting to £596 per month, it is more important than ever that UK adults consider their financial retirement plan carefully, including alternative sources of income.
Lack of independent pension wealth cause for concern
Dave Harris, Chief Executive Officer at more2life, comments:
“Today’s research is further evidence that the later life income discrepancy between men and women is a serious issue that we need to comprehensively address. A lack of independent pension wealth or relying on a partner’s income isn’t something that can be fixed overnight, so we need to raise awareness of the alternative options available for women in later life to boost their income in retirement.
“With more than a quarter of women owning property wealth in later life, it’s vital that they know how unlocking the value in their homes can be the difference between just making ends meet and living comfortably in retirement. Solutions such as equity release are popular amongst older homeowners looking to use their housing wealth to help fund their retirement. We need to make sure the over-55s, and women in particular, are supported as they make choices around how they use their assets to achieve the retirement they deserve.”