This means that, once she reaches retirement, the average woman is £7,500 a year worse off than a man of the same age and there is little hope of this stark gap narrowing dramatically any time soon.
This week, during Pensions Awareness Week (September 13-17) there have been renewed calls for the government to make relatively simple tweaks to automatic enrolment policy in a bid to help shrink the gap.
While we agree that changes to policy are important, the answer to this particular gender gap is much bigger than simply fixing pensions policy.
The People’s Pension, which provides workplace pensions to more than five million people across the UK, has long called for the lower contributions limit to be removed, meaning that pensions contributions would count from the first pound earned.
The gender pensions gap isn’t going to close by itself.We also agree that, once economic conditions, the minimum earnings threshold, which means that those earning below £10,000 a year from one job should be lowered to £6,240.
This change would give 1.3m lower earners much needed access to pensions saving, with the majority of these new savers being women.
It also makes real sense for the minimum age threshold for auto-enrolment to be lowered from 22 to 18, which, along with first pound earned, has already been promised by the government.
We also firmly believe the net pay anomaly, something the Conservative Party promised to review as part of its 2019 election manifesto, should be fixed as soon as is possible.
This would mean that 1.75m of the lowest paid workers, many of whom are women, would receive much need pensions tax relief.
The pension industry should do more to engage with women in their mid-40s and beyond who work part time.
If we can all help women understand the long-term effect reduced pension payments have on their available income in retirement, they will then have the knowledge to make their own informed decisions.
Our own calculations reveal that a woman who chose to return to full-time work aged 42 after 14 years of working part-time could be as much as £1,224 a year better off in retirement than a woman who stopped working at 28 and continued part-time hours throughout her career.
Considering that the new state pension will provide £9,339.20 a year in retirement, this is not an insignificant sum.
But society must be realistic and understand that better engagement and policy changes won’t close the gap completely.
In order to even consider consigning this particular inequality to history, the government must step up by supporting women who might want to return to jobs or work more hours once they have children.
Although times have changed, it’s an inescapable fact that in the 21st Century, women still bear the burden of caring for relatives, whether they are young or old, which unfairly affects their rates of pay and hitting their pension savings.
We have long called for ministers to do much more to help mums access affordable, quality childcare and we outlined a number of ways that they could do this, including through bigger grants for local authorities to provide greater funding for good quality pre-school childcare.
The report also recommends that consideration should be given to extending state pension carer credits to auto-enrolment.
Although the Government is rightly focused on the post-Covid economic recovery, the gender pensions gap isn’t going to close by itself.
This will only happen with robust, meaningful action from ministers.
Before we can say that saving for retirement is fair, more must be done to bridge the gender pensions gap.
Phil Brown is director of policy at B&CE, provider of The People’s Pension
