The gender pensions gap for private pensions stood at 35 per cent in 2018-20, although this figure fell to 32 per cent amongst those who are eligible for automatic enrolment (AE), analysis from the Department for Work and Pensions (DWP) has revealed.

In its inaugural report on the issue, the government revealed that the gender pensions gap also varied according to age bands, showing that the gender pensions gap is smallest for those aged 35-39 at 10 per cent, before increasing to 47 per cent for those aged 45-49.

However, the DWP pointed out that the gender pension gap fell again in the later years of working life, explaining that this is similar to the trajectory of the gender pay gap, which shows a relatively small gap until the age of 40 when it approximately triples due to different labour market trajectories of men and women.

The research also found that, for those eligible for auto enrolment (AE), the gap is smaller compared to the population-wide metric throughout all age bands.

In addition to this, the research showed that, for the age bands 30-34 and 35-39, when the gender pensions gap of all savers is smallest, the pension wealth of female savers eligible to be automatically enrolled is higher than male savers, reversing the gap.

The DWP noted that this finding is also in line with the high participation rates amongst female employees who are eligible for AE, with the report revealing that participation for all AE eligible female employees is higher than all AE eligible male employees despite the differences in working patterns.

However, the DWP acknowledged that some part-time workers earn less than the earnings trigger and may not be automatically enrolled into a workplace pension, meaning that these employees are therefore not included in the AE eligible population.

More broadly, when considering all employees in the UK, the DWP found that 79 per cent of female employees and 80 per cent of male employees participated in a workplace pension in 2021, giving a participation gap of all employees of 2 percentage points.

However, the DWP clarified that, as a result of the different employment rates between men and women, the UK population wide participation gap in 2021 to 2022 is 3 percentage points as 55 per cent of men and 52 per cent of women participate in a workplace pension scheme.

Despite the ongoing gender gap, the DWP's statistics revealed that pension saving has increased in real terms for both men and women since the introduction of AE in 2012.

In particular, the data revealed that, while AE eligible male employees saved £48.5bn into workplace pensions in 2012, compared to £33.2bn for female employees, this had increased to £62.6bn and £52bn respectively in 2018-20, representing real terms increase of £14.1bn for male employees and £18.8bn for female employees.

Despite this, the DWP acknowledged that the total contribution gap for all female employees compared to all male employees is around 17 per cent.

Whilst the gender pensions gap has fluctuated in recent years, the report showed that median female pension wealth around normal minimum pension age (NMPA) has increased in real terms since 2006 to 2008, recording a real terms increase of 90 per cent for the median female compared to an increase of 70 per cent for the median male.

Indeed, according to the data, the median female had £50,000 of real terms uncrystallised private pension wealth at age 50 to 54 in 2006 to 2008, increasing to £94,000 for the median female and £145,000 for the median male at age 55 to 59 by 2018 to 2020.

The research also considered the gender pensions gap by the type of pension, revealing that the gender pensions gap is smaller for those who hold some defined benefit (DB) pension wealth, and largest for those holding only defined contribution (DC) pension wealth.

The DWP said that it had welcomed industry suggestions as to how to create a definition of the gender pensions gap, before defining the gender pensions gap in private pensions in the report as the percentage difference between female and male uncrystallised median private pension wealth around normal minimum pension age (NMPA) for those individuals with private pension wealth.

Commenting on the report, Pensions Minister, Laura Trott, emphasised that whilst the pension participation gap has closed, the wealth gap persists, suggesting that the official measure will help track efforts to tackle the gender pensions gap.

“The success of AE has transformed the UK pensions landscape and brought millions of women into pension saving for the very first time. However, while the participation gap has closed, the wealth gap persists," she stated.

“The publication of an official annual measure will help us track the collective efforts of government, industry and employers to close the gender pensions gap and ensure women can look forward to the retirements they’ve worked so hard for.”

The Pensions Regulator (TPR) director of policy, analysis and advice, Louise Davey, also welcomed the publication of the new official gender pensions gap metric, suggesting that this will help focus the efforts of industry, regulators, government and employers on narrowing the gap.

"TPR is committed to working with industry and government to understand saver inequalities and create a workplace pension system that works for everyone," she continued.

“The successful roll-out of auto enrolment has had a huge impact on the savings landscape, driving up the number of people saving up for their retirement, including many women for the first time.

"In our role as regulator, we will continue to use our compliance and enforcement powers to protect savers and ensure all eligible workers get the pension they are entitled to.”

Industry experts also highlighted the inaugural report as a “vital” first step in addressing the gender pensions gap, although industry organisations have emphasised the need for further action to address gender pensions gap concerns.

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