More than two in five women plan to work part-time in retirement to counter the shortfall in their pensions according to Oxford Risk, behavioural finance specialists.
Their research highlights significant difference in income, savings and retirement strategies between men and women aged 55 plus.
As has been widely highlighted elsewhere, women have smaller pensions than men and are on target to receive less income from these savings. Overall men aged 55 plus expect to receive £23,700 annually from their pensions, while women anticipate just £18,000—a £5,700 difference.
In addition to pensions, men over 55 have £209,000 saved in cash and other investments on average, compared to £128,000 for women—a difference of £80,000. These disparities in overall savings further contribute to financial inequality during retirement.
As a result women plan to spend less than men in retirement on average by about £3,500 a year. However despite this women women still face a shortfall of £1,200 per year, whereas men expect a surplus of £1,000 according to Oxford Risk’s calculations.
The research also highlights that more than a third (36 per cent) of women over 55 are unsure how much they might receive from their pension each year, compared to just 20 per cent of men. This uncertainty, combined with lower savings, adds to the financial pressures many women face in retirement.
Oxford Risk’s research also identified distinct approaches to funding retirement. Women are more likely to consider part-time work (41 per cent) and property income (21 per cent) to fund their retirement than men (30 per cent and 18 per cent, respectively).
Men, however, are more likely to rely on self-invested personal pensions (25 per cent compared to 16 per cent of women) and investment portfolios (23 per cent compared to 10 per cent).
The research found that nearly half of women (50%) and 53% of men rely on cash surpluses to fund their retirement, according to the survey.
Over the past three years, the FCA has prioritised effective cash deployment as part of its Consumer Investments Strategy. However, Oxford Risk says that this reliance on cash undermines those efforts, highlighting the need for better support and guidance to promote smarter investment choices over the costly emotional comfort of underperforming cash reserves.
Oxford Risk head of behavioural finance at Dr Greg B Davies: “Our research highlights significant disparities between women’s and men’s financial security in retirement. Despite planning to spend less, many women face substantial financial gaps, with lower savings and less certainty about their retirement income.”
