Industry experts have highlighted the government’s first report on the gender pensions gap as a “vital first step" in tackling pension inequalities, although industry organisations have also stressed the need for further progress.

The government data showed that the gender pensions gap for private pensions stood at 35 per cent in 2018-20, falling to 32 per cent amongst those who are eligible for automatic enrolment (AE).

The report was highlighted as a “vital first step” in tackling the “profound inequalities” in pensions by LCP partner, Laura Myers, who commended Pensions Minister, Laura Trott, for getting this work done within months of coming into office.

“Not only does this report put the issue firmly on the government’s agenda, but it means we will be able to hold governments to account to make sure that progress is made on the yawning gap in pension rights between men and women,” she stated.

“Although good progress has been made in recent years in reducing the gender gap in state pensions, the gap in DC pension rights between men and women is steadily growing, and risks replicating the inequalities we saw in the defined benefit (DB) world.

“We look forward to working with the government and with others across the industry to come up with workable solutions to these longstanding problems.”

Speaking to Pensions Age, Pensions Equity Group (PEG) chair, Kim Brown, also welcomed the publication of the gender pension gap statistics and the information shared by the Pensions Minister, suggesting that this work will “support our common aim to bring equity to pensions using gender as a starting point”.

“It’s been a really exciting day for PEG seeing the steps the DWP taking to measure the issue and hearing the pension ministers commitments to AE reform which will support the aims of our group in delivering more equitable outcomes for pension savers.

“We really welcome the publication of the DWP’s statistics, which links well with our objectives to analyse industry data and consider the consistency of measuring, as well as looking at how we as providers and large companies can look to address the pensions gender gap and support the Pensions Minister in providing the evidence to remove it.”

Aegon head of pensions, Kate Smith, echoed this, arguing that whilst it is widely recognised that there is a persistent gender pensions gap, until now there has been no official means of measuring this.

“Regularly measuring the gender pensions gap should help to inform the impact of future pensions policy, such as the improvements to auto- enrolment and wider public policy such as the recent announced expanded free childcare for all under 5s," she suggested.

"The world of pensions is constantly evolving and it is helpful to track the gender pensions gap, specifically within the population eligible for auto-enrolment, as well as separately for those with DB and defined contribution (DC) pensions.

"This will provide greater insights into the underlying causes of the gap, why it has changed over time and how to address it going forward.”

Indeed, Quilter chartered financial planner, Megan Rimmer, argued that whilst there have been measures taken to address pension discrepancies, there remains a "substantial journey" to completely eradicate this gap, especially in the realm of private pensions.

In particular, Rimmer noted that women often have differing work patterns throughout their lives as compared to men frequently due to childcare responsibilities, pointing out that the pension contribution gap remains at 17 per cent.

"The government’s extension of its policy providing 30 hours of free childcare should provide a significant boost in addressing this issue," she continued.

"By making childcare more accessible, the shared responsibilities between partners could potentially decrease the gender pension gap that usually arises from women taking extended periods off work to care for children.

"Even though women currently earn less than men, this discrepancy over a working life can contribute to a more pronounced difference in pension wealth by the time they approach retirement.

"An encouraging policy step to address the gender pension gap is the government's recent commitment to rectify issues surrounding parents who have not claimed child benefit, thus missing out on the full state pension amount due to unclaimed National Insurance contributions.

"The government intends to legislate to allow eligible individuals to retrospectively claim National Insurance credit. Such initiatives are essential in advancing towards a more equitable state pension system but the private sector still has a long way to go before it closes the pensions gap."

Echoing this, Standard Life managing director, Gail Izat, agreed that the gender pension gap is “still way too high – we simply shouldn’t still be seeing such a huge discrepancy between men and women’s retirement savings as we move towards the mid 2020’s".

“The pay gap is a major contributing factor, and there’s also the fact that women are more than three times as likely as men to work part time, often as a result of taking on the majority of caring responsibilities within a family,” Izat agreed.

“These issues might be beyond the scope of the pensions world, but there are structural changes that could be made within the UK pensions model to help close the gap.

"Removal of the lower earnings threshold so people start contributions from the first pound of earnings would be a good start, as a higher proportion of female than male workers fall below the current £10,000 starting position.

“Hopefully the bill moving through parliament to legislate for this, passes, and is swiftly implemented.”

AJ Bell head of personal finance, Laura Suter, also pointed out that there are other ways that women can boost their retirement savings, suggesting that whether it is "maintaining pension payments during maternity leave, to increasing contributions if you return to work part-time, or boosting contributions before you go off, there are lots of ways to ensure a career break doesn’t leave a huge hole in your pension savings".

"There’s also lots of evidence to show that women don’t ask for pay rises as often as men, and a bigger income means bigger pension contributions," she added.

"Even for those who have got healthy pension savings, previous data shows that women are less likely to take as much investment risk as men with their pots – which can harm long-term returns.”

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