UK pension gender gap is closing but still a concern

The pension gender gap is shrinking in the UK, but men still retire with nearly twice as much as women.

This year's annual State of Retirement report from LV= revealed that women with occupational or private pensions reach retirement with around £107,000 on average, compared to men who retire with an average of £201,000.

Furthermore, 23% of women approaching retirement rely on the state pension alone, compared to 19% last year. Meanwhile, 9% of men are in this position.

However, retirees across the board still face financial issues with the average level of income falling far short of the cost of living. The report estimated that the average retiree will need at least £14,352 a year to cover essential expenses, when private and state pensions combined will only provide £10,590 on average.

Marek Góra writes that pension systems can only balance the interests of workers and retirees when they adapt effectively to demographic changes. He says that postponing adjustments can only increase economic and social costs, and that policymakers should work to make systems more transparent.

Meanwhile, Sergi Jiménez-Martin writes about the effects of minimum pension policies, which he says can guarantee a minimum standard of living after retirement and thus help to reduce poverty in old age. However, he acknowledges that minimum pensions can have a detrimental effect on productivity by lowering incentives for low-wage workers.

Read more here.

Related articles:
Redesigning pension systems, by Marek Góra
The incentive effects of minimum pensions, by Sergi Jiménez-Martin