Earnings gap hits women's pensions
Women are relying on their partners' pensions to support them as the impact of the gender earnings gap creeps into retirement.
by Michelle McGagh on Aug 06, 2012 at 09:38
The average 50-year-old woman is earning 60% less than a man of the same age, pushing a third of women to rely on their partner’s pension to fund their retirement.
A study by MetLife, an insurer, found an £11,000 average earnings gap between men and women at 50 years of age. Men take home an average of £30,000, compared to £19,000 for women.
The gap can be blamed partly on the number of older women in full-time work: just 44% of 50-year-old women work full time compared with 71% of men.
The impact of the gender earnings gap hits women not just when they are employed but also when they retire. The research showed a third of women were relying on their partner’s pension to provide income in retirement, and just 22% of women said they were the main income earner.
Both men and women, however, were struggling for financial security and have been dubbed the 'Uncertain Generation' by MetLife. The average 50-year-old said they would need an annual income of £38,600 to feel secure, and just a third of them believed their earning power has not yet peaked.
Dominic Grinstead, managing director of MetLife UK, said the Uncertain Generation were being forced to make decisions about their financial future in the context of economic uncertainty and volatility.
‘The average 50-year-old may feel they are a long way from retirement, but they are unfortunately also a long way from feeling financially secure, and just one in three is optimistic about their earning power.’
A survey by MGM Advantage earlier this year showed more people were returning to work after retiring for financial or social reasons.
A total of 9% of the retired population, one million people, are still in work. The retired population racks up 300 million hours a year in part-time work, worth £46.2 billion a year.
Many have had to return to work, and others have had to delay retirement, as a result of a combination of factors. People are saving less and being hit by faltering annuity rates when they reach retirement, and also have to cope with poor savings rates as the interest rate remains at an all-time low of 0.5%.