The UK gender pensions gap, the difference between the size of men and women’s private pensions pots, stands at 35% according to government analysis, though for some groups the gap was as high as 60%.
For every £100 saved in a pension scheme by a man, a woman typically saves only £65, according to the data released by the Department for Work and Pensions.
The gender pensions gap is even more pronounced for people whose wealth is saved only in direct contribution (DC) schemes. This group recorded the highest gender pensions gap of 60% and is largest in size with 792,000 men and 575,000 women.
Gender pensions gap
Gender pensions gap: half of women expect to work past retirement age
The second most common type of pension wealth is those with only defined benefit (DB) pension schemes DB only. This group, with 423,000 men and 589,000 women, has a gender pensions gap of 44%.
The smallest gap was 34% among 414,000 men and 321,000 women who have both DB and DC pension wealth.
Helen Morrissey, head of retirement analysis at Hargreaves Lansdown, described the gender pensions gap as “less of a gap, more of a gaping chasm”.
She said there was room for optimism though. “For the auto-enrolment eligible population the gap is slightly smaller at 32% so we can hope that gap continues to close as more women save into workplace pension schemes.
“Participation rates are also high – in some cases higher than men and the real-term increase in total female pension savings is £4bn higher than for men since the introduction of auto-enrolment.”
The gender pensions gap is smallest for those aged 35-39 (10%) and then increases to 47% for those aged 45-49. The gap then decreases again for older people, a similar trajectory to the gender pay gap which shows a relatively small gap until the age of 40 when it approximately triples due to different working trends of men and women.
Megan Rimmer, chartered financial planner at Quilter, said: “It’s a known fact that women, on average, earn less than men, consequently limiting the amount they can save towards a pension. Moreover, women often have differing work patterns throughout their lives as compared to men, frequently due to childcare responsibilities.”
Among adults aged 16 to 64, the male employment rate in 2022 was 79%, whereas the female employment rate was just 72%.
“Even though women currently earn less than men, this discrepancy over a working life can contribute to a more pronounced difference in pension wealth by the time they approach retirement,” added Rimmer.
Pensions minister Laura Trott said that recent government policy around childcare support will help address the gender pensions gap because it is largely a function of the pay gap.
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“It’s a multi-faceted problem, there’s no easy solution, but when you measure something I do think you tend to focus on it more,” she said.
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