Urgent action needs to be taken to address the UK’s gender pension gap, as new research of more than 4.5 million savers in the UK shows that it has barely changed since 2020, and in some age groups and sectors has deteriorated further.
Women are left with smaller pension pots at every stage of their career, with the situation worsening significantly as they approach retirement. The research, which analyses data from more than 4.5 million members across L&G’s defined contribution (DC) pension scheme clients, shows that women are always at a financial disadvantage, even at the start of their careers.
The initial gap of 16% widens as women reach their forties, accelerating to 31% as the impact of career breaks and unequal caring responsibilities begin to take effect. By the time people can take their tax-free cash at 55, the gap is over 50% and deteriorates further to 55% by retirement.
This new data for 2021 shows the gender pensions gap has decreased marginally across age ranges, but by only one percentage point for the start and end of women’s careers. On the current trajectory, women will still be retiring with vastly smaller pension pot sizes than men for many decades to come