Debt management could help women before retirement

16/02/2010

Women may be facing more financial difficulties than men once they reach retirement age.

New research from Prudential has revealed that women who retire in 2010 will receive a pension which is, on average, two-thirds less than that of their male equivalent.

Debt management could help these women to organise their finances before they become reliant on a pension which is significantly lower than their husband's.

A man who starts to draw his pension this year will receive an annual retirement income of around £19,593.

But his female equivalent is set to draw just £12,169.

Unfortunately, the group warned that the gender gap in pensions was only likely to grow.

Karin Brown, director of pensions and annuities at Prudential, said: "The reason women appear to get less in their pensions than men is embedded in years of history and, to a certain extent, because some women take a career break to have children which has an impact."

Pay inequalities may also play a role as according to the Office for National Statistics, men in full-time employment are paid an average of 12.2 per cent more than their female equivalents.

Leading debt solutions expert, EuroDebt, is backing up the Prudential findings with analysis of its own clients who have taken out a debt management plan.

"The figures for debt in the over 60s has gone up quite considerably since the recession really took hold," explained Kevin Still, director of EuroDebt.

"When we analysed our client base at the beginning of 2008 we found that our over 60s clients had an average unsecured debt of just under £26,000 with an average of eight creditors.

"By the back end of 2009 this had gone up to an average unsecured debt of just over £28,000. But what is also worrying is that we now have a higher proportion of over 60s clients that have a mortgage - just over 32 per cent compared to 21.5 per cent at the beginning of 2008."

Posted by Jim Mead

Tags; Retirement Money Problems,

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