Women will need to work an extra 19 years to retire with the same amount of money in their pension savings as their male peers, a new report has revealed.
The report from the Pensions Policy Institute found women’s pension assets are less than two thirds (62%) of men’s pensions by their late 50s.
According to the PPI, the gender pay gap plus different working patterns are partly to blame for the gender pensions gap. Women are less likely to be in employment than men and among those who are in employment 33% work part time compared to 9% of men.
Rachel Vahey, head of public policy at AJ Bell, called upon the government, regulators and the industry to work together to find a range of solutions to tackle the pensions gap.
“In 2024, 54 years after the introduction of the Equal Pay Act, this seems a strange predicament in which to find ourselves, but the labour market and social conventions aren’t moving quickly enough to help most working women today.
“Men still earn more than women and so pay in higher contributions. The gender pay gap is, unfortunately, alive and well. Even if women start off earning only 3% less than men in their 20s, this increases sharply to 10.3% for those in their 40s, as more women move to part time hours or stop working altogether after having children.”
Vahey said that the cost of childcare and the sharp rise in cost of food and energy has placed women under further financial pressure. According to AJ Bell’s research, 41% of men pay more into their pension than the minimum required, compared to only 27% of women.
Vahey added: “There is a long road to pensions equality. Closing the gender pay gap would certainly help. But many women just don’t engage with pension savings. Government, regulators and the pensions industry need to find ways of reversing this trend and getting women thinking about their financial future.”
