Decisive policy action is needed by government to fix the gender pensions crisis, senior industry professionals have stated.
Sean Christian, managing director and executive director of the wealth management division at Canada Life, called the gender pension gap between men and women a serious "inequality" which "can only be addressed through decisive policy action".
He urged the government to make "relatively simple changes to the way auto enrolment works today, [which] would benefit both men and women but would go a long way towards levelling the playing field.
"Changes such as removing the lower contributions limit would let more people benefit from every pound earned, while removing the £10,000 threshold would make auto enrolment more inclusive and begin to level up pensions for all.”
Dave Harris, chief executive at More2life, said: “It’s clear the Covid-19 pandemic has caused significant disruption to many people’s retirement savings, but the impact has been most acutely felt among older women.
"As we begin to think about what a post-Covid society looks like, it’s vital that the industry and government does more to encourage women to engage with long-term financial planning."
Their comments came after two pieces of research carried out by each provider ahead of Pensions Awareness Day today (Wednesday 15) found a stark divide between the genders when it came to retirement outcomes.
The findings from both More2life and Canada Life pointed to a sharp mismatch between how much men and women are likely to receive from their pensions savings, which has created a lack of confidence among women about whether they will be able to achieve their expected retirement outcome.
According to equity release lender More2life, when life expectancy is taken into account, the over-55’s gender pension gap has widened to £183,936 in 2021, an increase of £26,673 (17 per cent) since last year.
This is despite women on average contributing more of their income toward pension pots than men (9.4 per cent compared to 8.3 per cent).
More2Life analysed data from official government sources, collated by the Centre for Economics and Business Research, and from its own poll of more than 1,000 UK adults, carried out by Opinion Matters earlier this year.
The analysis found that women have to work an average of 54.5 years to reach the same level of pension savings that a man can reach in 40 years (14.5 years or 36 per cent longer).
Moreover, Covid-19 has had a significant dent in women's financial wellness. According to more2life's analysis, 30 per cent of women reported that their financial situation has worsened since the start of the pandemic, compared with 24 per cent of men who reported the same.
The widest discrepancy in retirement incomes between genders occurs for those who have worked for over 50 years. Of these individuals, men received £19,404 in annual retirement income compared to women on £11,592 - a difference of 40 per cent.