There is a “stubborn” gender pensions gap across all ages with women struggling to build pension wealth throughout their working life, analysis from Interactive Investor has revealed.

The analysis, which used figures from the Office for National Statistics’ (ONS) pension wealth data, showed that, women aged 25 to 34 have 45 per cent less pension wealth on average than men.

This figure fell to 30 per cent for women aged between 35 and 44 before increasing to 46 per cent for women aged between 45 and 64, suggesting a “persistent” gender pensions gap across pension savers of all ages.

The ONS figures also found that the gender pensions gap has nearly doubled among those with pension wealth in six years for women aged between 45 and 54, rising from 25 per cent in 2016 to 36 per cent in 2022.

Meanwhile, for women aged 45 to 64 with pension wealth, the gender pensions gap rose from 36 per cent in 2016 to 46 per cent in 2022.

The data revealed that the gender pensions gap stands at £89,000 for women aged 55-64 with pension savings.

Interactive Investor said that based on ONS data, its calculations show that one in three women have no pension at all, compared to one in four men, despite rising levels of pension participation since 2012, when auto-enrolment (AE) was introduced.

The company noted that this gap has remained consistently high for the past 10 years.

Commenting on this, Interactive Investor senior manager, Camilla Esmund, said that despite “strides forward” in workplace equality, and the success of AE, women in the UK are still retiring with “significantly” less financial security than men.

She added that the data emphasised that AE alone is not enough to “bridge the gap” and therefore greater engagement is needed.

“Women still face multiple and systemic hurdles when it comes to building pension wealth,” Esmund said.

“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.

"Efforts to close the gender pay gap have fallen short when it comes to pension wealth.

“The wealth divide is even larger than the income gap because wealth compounds over decades. Even a small income gap early in a career can translate into a massive wealth gap by retirement."

In addition to this, Esmund explained that while the gender pensions gap has narrowed to 7 per cent among full-time workers, it masks a “deeper systemic issue”.

Esmund said that the pay gap, across all workers, currently stands at 13 per cent, largely due to the higher number of women working part-time.

Additionally, she stated that millions of women are out of work due to caregiving responsibilities.

In late 2023, 25 per cent of working-age women were economically inactive, compared to 18 per cent of men in the same age group.

According to government research, in late 2023, 5.44 million women aged 16–64 were economically inactive (25.3 per cent of women in this age group) compared to 3.84 million men in the same age cohort (18.4 per cent).

Given this, she said the “real” gender pay gap is therefore far higher than 13 per cent, with a “significant knock-on impact on women’s retirement wealth”.

Interactive Investor’s analysis of the ONS data also found that younger women struggle to build pension savings, with a 45 per cent gap opening up for pension savers aged between 25 and 34.

“Worryingly, there is a growing gender pensions gap among younger women, with those in their 20s and 30s already experiencing a stark gender wealth divide,” she continued.

“This suggests that we could see an even bigger gender pensions gap in the future.

“Without research and data reflecting the true realities of pay and retirement planning, we won’t be able to address the gap meaningfully and risk perpetuating gender inequality for future generations.”

Furthermore, Esmund stressed that in addition to women struggling to build up pension wealth, they are also more likely to have no pension savings at all.

Indeed, the data showed that 8.7 million women still have no pension, compared to 6.5 million men.

“Women are more likely to take time out of the workplace long term, potentially relying on their partner’s pension to provide for them in retirement,” Esmund said.

“Greater engagement, and empowering women to take control of their financial futures, is going to play a key role in helping to close this persistent gap.”

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