The gender savings gap remains “unacceptable” according to Scottish Widows, despite its survey finding that women in the UK are saving more for their retirement than ever before.

In its 15th Annual Women and Retirement Report, the life insurer has estimated that 57 per cent of UK women are now saving enough for their retirement — the highest proportion recorded by the study.

The report says that the number of women contributing something to a pension pot has risen by 14.6 per cent over the last 15 years, while average saving levels among women are up 4.6 per cent since 2008, equating to an additional £5,900 in income for every year of retirement.

However, despite this progress, the gender pay gap means that men are still putting away more money overall. Scottish Widows said that men are benefiting from an additional £78,000 in their pension pot at retirement on average.

The report says that lower to middle female earners have seen the smallest improvements in savings rates over the last decade, with just 47 per cent of women earning between £10,000 and £20,000 saving enough for retirement.

Scottish Widows says that in contrast, 65 per cent of those earning £40,000 or more are making adequate provision.

Women in this lower‐middle earner group face competing demands on their income such as paying for childcare or saving for a property, with seven in 10 likely to face financial difficulties.

As a result, more than a third (37 per cent) see no other option but to opt out of their pension scheme to manage cash flow.

Scottish Widows distribution director, Jackie Leiper, said: “We’ve come a long way, but 15 years later there’s still an unacceptable gap between men and women.

“The groups who are often overlooked, such as lower‐middle income women, need more support to overcome the challenges they face in saving for the future.”

Scottish Widows wants to see the introduction of a series of reforms that allow for a more “tailored approach” to saving through a new “Brit Saver”retirement savings proposition.

It says that this would give more flexibility to those wishing to juggle the challenge of retirement savings, with the challenge of saving for a home and to safeguard against hardship in the short term.

The reforms include a mechanism that will provide default access to pensions for the self‐employed and building greater flexibility into pension products by increasing default savings and allowing savers penalty free access to some of their pension savings in times of financial hardship.

In addition, Scottish Widows wants to see savers given limited access to pension funds to help them top-up a first home deposit.

The report says that the policies should be introduced in tandem with higher default contributions rates for employees and the self‐employed, alongside an annual £500 government top‐up.

Employer contributions should also continue even when employees choose to opt‐out.

Leiper said that the reforms would ease the financial stresses that disproportionately impact women, such as those that go alongside life events, including starting a family and buying a first home.

Commenting on the report, The People’s Pension director of policy, Gregg McClymont, said that gender pensions inequality could only be tackled by addressing the “motherhood penalty”.

“To look after their children, women often reduce their working hours or stop working altogether for a period and their rates of pay and potential for progression can be unfairly affected, all of which mean their pension savings take a hit,” said McClymont.

“While many women choose to change their working lives because they want to spend more time with their kids, our research is clear that the high cost of childcare is also a key factor.”

The People’s Pension has called on the next government to recognise that caring is an economic activity that should attract workplace pensions contributions and to lower the threshold at which workers are auto-enrolled into a pension scheme.

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