Research released by Barnett Waddingham shows pension savings can be 10 per cent lower for a woman who took two breaks early in her career.
Women in their thirties who take two 12-month career breaks would need to up their pension contributions by 1 per cent to get the retirement they would have got without breaks, according to Barnett Waddingham.
If they wait until age 55 to top up their pensions they will need to increase contributions by 6 per cent, according to the research.
The study also confirmed women are saving less than men, leading to smaller pension pots at retirement - a range of 25 per cent to 45 per cent across the schemes analysed.
Barnett Waddingham’s research was conducted across 35,000 members in seven defined contribution pension schemes, which were picked at random and contained 600-14,000 members.
However, research from Scottish Widows late last year showed the pension contribution gap between men and women had fallen to the narrowest on record. Though the provider conceded there was still a long way to go to reach pension parity.
According to Scottish Widows’ latest Women and Retirement report, published on November 11, a record 59 per cent of women were saving adequately for their retirement, compared with 60 per cent of men.
However, the continuing gender pay gap at that time and part-time working ratio meant women were still saving £1,300 a year less than men.
Stephanie Pickering, independent financial adviser at Verity Wealth Management, told FTAdviser: “If a woman is self-employed then she might be more affected by a career break; employed women are likely to still have contributions paid if they are on maternity leave.
“If someone stops paying into their pension pot they will have to make it up at some point and the sooner the better – it could affect men as well who might take paternity leave.”
In February this year, women who may have been forced to bring forward retirement plans due to the pressures of Covid-19 were urged to make sure their pension pots are robust enough to stay the course.
According to Deborah Chapman, personal wealth adviser at Schroders Personal Wealth, pension pots need to "last the course", but with statistics showing more women are taking early retirement as a result of Covid, she has urged "planning as soon as possible".
Ruth Gillbe is a freelance reporter for FTAdviser