Women in the UK population face a staggering £89,000 pension shortfall compared to men in the 55-64 age group, new data from interactive investor has revealed.
These findings, based on Office for National Statistics (ONS) pension wealth data, highlight a persistent gender divide in retirement savings that has remained high for the past decade.
Despite advances in workplace equality and auto-enrolment schemes, 8.7 million women currently have no pension savings at all, compared to 6.5 million men.
Furthermore, the gap highlights a growing crisis in retirement planning, with women consistently struggling to build their pension savings throughout their working lives.
The pension wealth divide is rapidly widening, with the gap increasing from 25 per cent to 46 per cent between 2016 and 2022 for women aged 45-54.
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Older woman are at risk of falling into a pension shortfall
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A similar trend is seen among those aged 55-64, where the gap has grown from 36 per cent to 46 per cent over the same period.
“Despite strides forward in workplace equality, and the success of auto-enrolment, women in the UK are still retiring with significantly less financial security than men,” said Camilla Esmund, senior manager at interactive investor.
“Greater engagement is needed,” she adds, noting that auto-enrolment alone isn’t sufficient to bridge the gap.
The situation appears equally concerning for younger generations, with women aged 25-34 already experiencing a 45 per cent pension wealth gap compared to their male counterparts.
This gap fluctuates across age groups, dropping to 30 per cent for women aged 35-44 before climbing back to 46 per cent for those aged 45-64.
Women are at risk of a retirement shortfall
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“Women still face multiple and systemic hurdles when it comes to building pension wealth,” explained Esmund.
“They are more likely to work part-time or take time out of the workplace to care for loved ones, leading to a lifetime of lower contributions and the potential for a smaller pension pot in retirement.”
The impact extends beyond pension savings, with the overall pay gap across all workers standing at 13 per cent, largely due to women’s higher representation in part-time roles.
Recent data shows that 25 per cent of working-age women were economically inactive in late 2023, compared to 18 per cent of men, further widening the wealth divide.
“While the gender pay gap has narrowed to seven per cent among full time workers, this masks a deeper systemic issue,” Esmund noted.
“The real gender pay gap is therefore far higher than 13 per cent, with a significant knock-on impact on women’s retirement wealth,” she added.
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The outlook appears particularly concerning for future generations, with experts warning the pension gap could widen further.
“Worryingly, there is a growing gender pension gap among younger women, with those in their 20s and 30s already experiencing a stark gender wealth divide,” Esmund warned.
“This suggests that we could see an even bigger gender pension gap in the future.”
She emphasised that without proper research and data reflecting the true realities of pay and retirement planning, there is a risk of “perpetuating gender inequality for future generations.”
