Govt sets 2040 gender state pensions gap goal

Gender pensions gap deteriorates with age

Women have smaller pension pots than men at every stage of their career, with the situation significantly deteriorating as they near retirement, according to L&G analysis of its 4.5mn defined contribution clients.

In 2021, the gender pensions gap sat at 16 per cent for savers in their twenties, down from 17 per cent in the prior year.

The gap rose to 31 per cent for those in their forties last year, then 51 per cent for savers in their fifties. At retirement, it sat at 55 per cent, compared with 56 per cent in 2020.

L&G commercial director of workplace savings Katharine Photiou said: “It’s time women stop being penalised for things outside of their control, like the high cost of childcare, or being paid less than their male counterparts.

“We know that women feel significantly less confident, and are more likely to struggle on knowing where to start when it comes to making financial decisions. 

“Industry and government must therefore work together to ensure education and engagement around savings and investments increase,” she continued. 

“For example, too few know about the flexibility that couples have in being able to contribute to their partners’ pension while they are on parental leave. This is something that can significantly reduce a woman’s pension shortfall.”

This article has been amended to state that 2040 is goal to end the state pension gender gap

Alex Janiaud is deputy editor at Pensions Expert