Recent research has suggested that falling annuity rates will mean that women within the UK will be required to work on average, seven months longer than men, if they want to retire with a pension income equal to the average industrial wage.
Previously, women were able to retire with a pension income equal to the average industrial wage, five months before men; however the latest research has revealed that this is no longer the case, reporting that women are now required to work seven months longer.
In further bad news for females planning for retirement, it has been suggested that when the EU Gender Directive comes into force in December, due to the directive outlawing gender-based bias when setting annuities, women will face further challenge when pension planning.
When the directive comes into force annuities between the genders will become equal, as providers will no longer be able to take into account gender or life expectancy; and this is expected to lead to a fall in annuities – which will be larger for men.
The research into annuities affecting retirement planning comes on the back of a poll which suggested that traditionally women find it harder to save for retirement, compared to men, because they are more likely to work part time or have a full-time caring role; whilst prioritising living expenses and paying back debt.
If you’re concerned about your retirement planning, the affect the EU Gender Directive will have on your pension plans or if you want to discuss pension planning further, book an appointment with myself or a member of the Milsted Langdon team.
Milsted Langdon Director, Peter Groves, specialises in strategic business and tax planning, services for high net worth individuals and professionals.