Women could face income 'shock' in retirement

Canada Life has warned that many women could face an income “shock” in retirement due to their low levels of retirement saving.

To coincide with Talk Money Talk Pensions Week, the provider has highlighted research it conducted earlier this year, which suggests that many women are not going to be able to match their retirement income expectations given their current saving levels.

When asked by Canada Life, women believe they need about £1,421 a month, after tax, to live comfortably in retirement.

Yet on average, single female pensioners received £206 per week in the 2017/18 tax year, meaning that some women may receive as much as £500 a month less than they expect.

The research also found that the majority (56 per cent) of women feel unprepared for retirement.

Canada Life Home Finance head of marketing and communications, Alice Watson, said: “The outlook for some women in retirement is worrying. And whilst it’s important that the stark reality facing many women is laid clear, awareness alone is insufficient to drive material, positive change.

"More must be done to support the financial future of women in the UK - policymakers, providers and industry bodies all have an important part to play.”

The provider has said that more single women are turning to their properties to supplement their retirement income.

It has cited the Equity Release Council’s 2019 spring report, which shows that single women over 55 accounted for over a quarter of new equity release agreements made in late 2018, a 50 per cent increase from the previous year.

“Positively, more women are being resourceful when it comes to using their wealth holistically, with a growing number recognising the role that their property can play in their financial plans,” said Watson.

“The increase in the number of women using lifetime mortgages demonstrates how releasing equity can reduce the income shortfalls experienced by many women in retirement.”

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