Research by the Pensions Policy Institute has revealed that women aged 55-59 have approximately half (54 per cent) the pension wealth of men of the same age.
The research provides evidence about the gender pension gap as the Pensions Commission prepares to make recommendations to the government on the broader questions of adequacy, fairness, and sustainability within the UK pensions system.
The research concluded there was a 39 per cent reduction caused by gendered working patterns, a 19 per cent reduction caused by the gender pay gap, and a 12 per cent increase caused by the availability of more generous pension schemes in public sector which has a higher proportion of women. Additionally, there was a 1 per cent increase from a slightly higher propensity of women who participate in automatic enrolment.
Sarah Coles, head of personal finance at AJ Bell, says: “A major chunk of the gender pensions gap is carved out by the part-time penalty women pay for working more flexibility around caring responsibilities. The impact doesn’t fade away completely when they return to work either, because women still face the gender pay gap, which makes it far harder to build the pension pot they need for the retirement they want.”
The SPP report also noted that women who retired under the old state pension system (pre-2016 retirements) receive around 13 per cent less in state pension income than men who retired before 2016, on average.