The average women would need to increase their pension contributions at the start of their career by 5 per cent in order to close the pensions gender gap "almost completely", according to analysis from Scottish Widows.

The research, published on International Women's Day (8 March), found that a 4 per cent rise in contributions would result in an increase of nearly £75,000 at retirement, whilst a 5 per cent increase would see their pension at retirement rise by £94,000.

The analysis was highlighted alongside previous research from Scottish Widows, which found that women would need to work 37 years longer than their male peers to accumulate the same income, retiring, on average, with £100,000 less.

This was despite the gender pensions gap reducing to just 1 per cent, the narrowest gap on record, with 59 per cent of women saving adequately, compared to 60 per cent of men.

The previous research suggested that the pandemic has further exacerbated the gender pensions gap, with almost half (49 per cent) of women under the age of 25 furloughed amid the crisis.

The latest findings from Scottish Widows have suggested that a lack of engagement amongst younger female savers is also contributing to lower savings levels, however, with more than one in five (21 per cent) of women under 25 admitting that they have not started thinking about retirement.

In addition to this, 46 per cent of women in their 20s stated that that they are saving the recommended minimum of 12 per cent, compared to 56 per cent of men.

Commenting on the findings, Scottish Widows managing director of pensions, stockbroking and distribution, Jackie Leiper, stated: “Women were already facing systemic challenges when saving for retirement.

"We know that young women have been some of the hardest hit by the short-term financial impact of the pandemic and this has only exacerbated the challenge of reaching pensions parity.

“At the same time, caring responsibilities and high childcare costs are keeping women out of the workforce, lowering their contributions and denting their pension pots.

“Whilst we can’t change societal norms overnight, progress is still possible to help young women achieve a comfortable retirement.

“By taking control of their contributions and increasing them as early as possible, young women stand a fighting chance of improving their long-term savings outlook.”

Industry experts have also reiterated calls for further support to close the pensions gender gap, with Royal London pension specialist, Helen Morrissey, underscoring the need to increase access to affordable childcare.

“These figures show the terrible cost women are having to pay for taking time out of the workforce with several factors conspiring to undermine their retirement planning," she stated.

"We must look at ways to make it easier for women to return to work and build a sustainable retirement income such as increasing access to good quality childcare at a reasonable cost.”

In light of International Women's Day, NFU Mutual has also urged female savers to "bridge the gap" and "strive for retirement peace of mind" as research revealed that less than 35 per cent of NFU Mutual pensions are taken out by women.

Furthermore, the pension savings of female customers were worth, on average, £7,390 less then the pension pots held by men.

NFU Mutual savings specialist, Anisa Bryne, commented: “International Women’s Day is the perfect time to strive for more peace of mind in retirement.

“The significant difference in average pension values shows women are missing out on valuable tax relief available to them.

“It’s still true that women are more likely to have interrupted careers due to pregnancies and bringing up children, and pension contributions often fall during this time.

“Saving for retirement is important regardless of gender. As well as empowering women in their financial lives, there can be financial benefits to couples having their own pensions.

“It allows a couple to double the amount that can be paid in yearly and overall, which optimises the benefits of tax relief.”

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