A joined-up effort from policymakers, employers and the pensions industry is needed to tackle the gender pensions gap, Penny has said, after its research revealed a 63 per cent gender gap in the average pension pot sizes transferred through its platform.

This is in line with previous research from the Association of British Insurers, which found a gap of nearly 66 per cent between the average pension pot at retirement of men and women.

Meanwhile, statistics from the Department for Work and Pensions showed that by their late 50s, women typically hold just half the private pension wealth of men, intensifying long-term income inequality.

Additionally, research from the Office for National Statistics stated that retired women are almost twice as likely as men to rely solely on the state pension as their main source of income in retirement.

The firm explained that the “stark” gender divide in pension values can be attributed to factors such as career interruptions, part-time employment, and the persistent gender pay gap that places women at a disadvantage during retirement.

Indeed, women are more likely to reduce hours or take time out for childcare or eldercare, leading to lower contributions and missed compounding.

Low pension engagement is also a key factor, as research from the Money and Pensions Service found that women are less likely to actively engage with their pensions or consolidate old workplace pots, missing out on opportunities for growth and control.

Penny also highlighted the gender pay gap as a contributor to the problem, explaining that, in 2023, the median gender pay gap in the UK stood at 14.2 per cent, and since pension contributions are often earnings-linked, this compounds over time.

In terms of solutions, the company offered several proposals, including lowering auto-enrolment thresholds to bring more part-time and low-paid workers into the system and providing targeted financial education for underrepresented groups.

It also suggested that pension contributions during parental leave be jointly funded by the state and employers, as well as simplifying pension consolidation tools to reduce administrative burden and boost engagement.

Digital tools, Penny said, can also play a “vital” role in improving engagement, particularly among women and younger savers.

It noted that making pension data easy to find, understand, and act on is a key part of rebuilding trust and encouraging better financial outcomes.

Penny head of pensions, David Henderson, said the data reinforced what is already known – the gender pension gap is “significant, persistent, and deeply rooted” in the structure of working life in the UK.

However, he emphasised that this "isn’t just a pensions issue - it’s a reflection of wider inequalities that play out over a lifetime".

"We need a joined-up effort from policymakers, employers, and the pensions industry to create a more inclusive and supportive system for all savers," he stated.

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