Women retire on £5,750 less than men.....

[manzi18]

I read an article about how women retiring this year expect to receive a retirement income of £12,250, a third less than male retirees.

Apparently the gender gap has closed slightly from last year, when women expected to receive £6,500 less than men, and since 2010 when the gap was £7,400. It said this can be attributed to men receiving less pension rather than women increasing their pension income. The amount a woman can expect to receive in retirement has in fact fallen since last year from £12,900 to £12,250.

Figures such as nearly half of women, 49%, believe they will not have enough income for a comfortable retirement.

I am defiantly in that 49%. I have not worked since my second was born in 2007 and am currently still at home with my youngest.

I know it is imperative for anyone looking to secure a sufficient income when they retire to begin saving as much as they can, as early as they can, and to do so regularly through life....... but it is not always as plain sailing as that.

Hmmmmm some food for thought....

I think the food for thought is that very few people, male or female, are saving anything like enough for their old age. Just this week I've been collating all my various bits and pieces of pension funds that I've acquired down the years and it's really difficult to judge what income that will turn into by 2020-2022 when I hope to retire. In the days of final salary schemes and long-term employment it was pretty clear cut. With money-purchase/annuity arrangments it's a lot more of a gamble. With the stock-market, cash deposits and property all rather wobbly, it's difficult to work out how much to set aside and where.

£12000 a year is a lot more than I earn as a nursery nurse
Apparently I can't contribute to a pension as it would drop me below minimum wage.
I will get a share of DHs decent pension, and the mortgage being paid will save us about £12000 a year anyway.
Women are always going to have smaller annuities as they have a longer life expectancy, even discounting lower pay and time off for maternity/child rearing.

@InMySpareTime. You might find this link interesting. If you're over 22 and earn more than £7450/year you should be offered a workplace pension at some point after October 2012. Who told you that you can't contribute to a pension?

I earn less than that, £443.50 a month.
The deputy manager said pension contributions or childcare vouchers aren't allowed to push your hourly rate below min wage.

I recently took on an extra day, which should push my wage up to £7,800 this year if my maths is correct
Ooh, I might finally get a pension of my very own, at the tender age of 33!

Op is that total retirement income including both state pension and private pension?

@InMySpareTime. There is nothing to stop you contributing to a private stakeholder pension, regardless of your income. You can increase, decrease, start or stop contributions at any time with those.

Won't fees eat up my fund, given the amount I have available to invest?
On the plus side, at least I don't pay income tax.

Not necessarily. Annual fees tend to be in the 1% - 1.5% region. What you should also consider is that for every £80 you put in your pension fund, the government adds another £20 in tax relief, even if you don't pay income tax. By not having a pension, you're missing out on free money.

With the minimum income guarantee on pensions, would I be effectively penalised for having a small pension though, as any income below the threshold would be topped up? Would I be sacrificing money I could spend on my family for no real gain?
Assuming the state pension actually exists by the time I retire, which is a big "maybe".

No idea. However, if you're the kind of person that likes to pay your way and be financially independent during your working life, I don't see why you'd throw yourself on the state in retirement in the hope that they look after you.

The plan is that by retirement I'll own several day nurseries which will provide a decent income or could be sold for a lump sum.
I just wondered if the MIG tapered with pension income or if it's a straight top up. i.e. whether it actually makes fiscal sense having a small pension or whether my money would be better spent paying the mortgage off now to save interest later.

As of 20 December 2012 gender neutral pricing comes in and there will be no difference in annuity rates.

can't see women's going up though!

The level at which pension credits stop all together is quite low e.g. £10,000+ in savings or a private pension of £200+/month. If you're planning to get an income from a business or cash from the sale you probably wouldn't qualify for top-ups. Therefore, anything extra you can add to your retirement income - whether that's from a pension or another source - would benefit you