State pension gender gap narrows

The state pension gender gap narrowed in 2021, with women receiving an average state benefit of £148.82 per week in November 2021, up from £143.43 per week in November 2020, according to figures from the Department for Work and Pensions (DWP).

In contrast, the data revealed that the mean weekly state benefit received by men had fallen over the year, dropping from £172.12 to £172.68 per week.

The median income for women on the basic state pension was £146.39, compared to £172.68 per week for men, whilst women on the new state pension got an average of £164.90 per week, compared to an average of £170.51 for men.

The latest figures also revealed that around 1.5 million women received less than £100 per week in state pension, although this represented a fall on the previous year, when an estimated 1.67 million received less than £100 per week.

However, only 448,082 men received less than £100 per week in state pension compared to 465,479 in November 2020.

Commenting on the figures, Hargreaves Lansdown senior pensions and retirement analyst, Helen Morrissey, noted that the introduction of the new state pension in 2016 had "significantly boosted" the amount women receive.

“As more women retire into the new state pension system we should see incomes continue to grow and the introduction of auto-enrolment will see many more women further build their retirement resilience with a workplace pension," she stated.

Despite the improvements, Morrissey emphasised that "it is hugely important women focus on building their own retirement wealth", noting that the new state pension does not allow you to inherit state pension entitlement from a spouse in the same way the old system did, meaning women’s state pension is based on your individual national insurance record.

“Similarly, it can be tempting to rely on a spouse’s workplace pension provision if it is particularly generous, but in the case of separation or divorce many women may find themselves approaching retirement with little in the way of pension income," she continued.

“The state pension forms the backbone of peoples’ retirement planning. Under the current system you need ten years’ worth of national insurance (NI) credits to qualify for a state pension and 35 years’ worth to qualify for the full amount.

“Women can often struggle to reach the full amount because they spend time out of the workforce looking after families. However, claiming state benefits during these times can mean you can still claim NI credits and build your entitlement.”

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