retired woman
© G. Baden/zefa/Corbis
Bleak prospects: Women retiring now are paying the price for taking time out earlier in their careers to look after their families
One in four women will be living below the poverty line when they retire, a study reveals today.

Researchers found that 26 per cent of women who plan to retire this year will have less than £10,000 a year - or under £200 a week - to live on when they stop working.

The findings highlight the nightmare facing women who are paying the price for deciding to give up their jobs to bring up their children instead of staying at work and building up a pension.

An annual sum of £10,000 a year will barely cover the basics such as food, fuel and utility bills.

It is below the minimum income standard set by the Joseph Rowntree Foundation, which estimates somebody needs at least £14,400 a year to escape poverty.

By comparison, the average worker in Britain earns around £26,000.

The study, from insurance giant Prudential, which polled more than 10,000 adults, found women are far worse hit than men by pensioner poverty.

Only 12 per cent of men who retire this year will have to try to make ends meet on less than £10,000 a year.

The amount those surveyed will have to live on is based on their income from the state pension, any additional pensions and the income from any other savings. The full basic state pension is £97.65 a week. In the Budget last week, Chancellor George Osborne announced that the Government will introduce a flat-rate state pension for everybody of about £140 a week.

This is designed to help women who are facing pension poverty because they devoted themselves to looking after their children rather than building up their pension. More details of how this will operate are expected shortly.

Yesterday another report said the Government has triggered 'an angry backlash' with its legislation to increase the state pension age. The charity Age UK said it is being 'inundated' by 'furious' emails and letters from women who face working up to two years longer to get the pension.

The state pension age is rising gradually over the next nine years. At present, women can claim the pension a few months after they turn 60.

Under Labour, the state pension age for women was due to rise from 60 to 65 between 2010 and 2020. But under money-saving proposals drawn up by the Coalition, women will retire at 65 by 2016 and then their pension age will rise to 66 over the following four years.

Men's retirement age of 65 will begin to rise from 2018, so that both men and women get their pensions at 66 in 2020.

Around 2.6million women are affected. The biggest losers are a group of 33,000 women - born in one month in 1954 - who will have to wait an extra two years before their state pension is paid.

Michelle Mitchell, charity director at Age UK, said: 'By breaking its promise on the state pension age, the Government is hurting millions of hard-working people who believed their retirement was just around the corner.'

She acknowledged that rising life expectancy means that the state pension age must go up, but criticised the proposed changes as 'too much, too soon.'

Labour is proposing that the state pension age should rise to 65 for both men and women by 2020, and go up again to 66 by 2022.

Labour pensions spokesman Rachel Reeves said the current timetable was 'unfair'. The House of Lords will vote on the legislation today.

Pensions minister Steve Webb insisted there was no alternative, despite his sympathy for the women affected.

'In a country where ten million of us will live to be 100, we simply can't go on paying the state pension at an age that was set early in the last century,' he said.