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Pensions: Gap Between Genders 'Narrowing'

(c) Sky News 2012

The gap between men's and women's retirement incomes has narrowed, but men still end up with £5,750 more a year, a study has found.

Women retiring in 2012 can expect to do so on £12,250 per annum, compared with an average of £18,000 for men, according to Prudential Insurance.

But this is less than last year's gap of £6,500 and has continued to narrow steadily since the first research in 2009.

The decreased gap is mainly due to male incomes falling than women boosting their pension pots.

The typical sum that men and women expect to retire on in 2012 including their private, company and state pensions has reached a five-year low of £15,500 annually, compared with £16,600 in 2011.

Nearly half (49%) of women surveyed believe they will not have enough income for a comfortable retirement, compared with 40% of men, Prudential (LSE: PRU.L - news) said.

Analysts have found that a 65-year-old man with £100,000 could have bought a level income of £7,855 in July 2008, but someone in the same situation this year would only receive an income of £5,923, a drop of just under 25%.

The retirement gender gap was found to be widest in the South East, where women retiring this year expect to have £7,878 less income a year on average than men at £12,259 compared with £20,137.

Vince Smith-Hughes, Prudential's retirement income expert, said: "The pension gender gap appears to be narrowing, but there is still a long way to go.

"Not only does the gap remain stubbornly wide, but anticipated retirement incomes have this year hit a five-year low for both men and women."

Pensioners are facing a massive squeeze in their finances after changes announced in the Budget.

Chancellor George Osborne announced that income tax allowances for pensioners will be frozen in cash terms, in a move he expects will raise £3.3bn for the Treasury.