Women will reach the age of 55 with 35% less in their private pension pots than men, according to a new government study.

Research from the Department for Work and Pensions (DWP) analysed private pensions data between 2018 and 2020 and found that for every £100 a man has saved in his pension, a woman has just £65.

For those eligible for automatic pension enrollment, the gender gap was found to be slightly smaller, at 32%.

Between 2018 and 2020, the DWP estimates that the average pension pot for a woman stood at £94,000, compared to £145,000 for a man.

The report marks the first time that the government has looked into the true scale of the gender pension gap, and the findings are stark, with women set to face a major shortfall when it comes to funding their retirement.

The government data also found that the gap for women in their 30s is 10%, but shoots up to 33% in the 40-44 age group and then up to 47% for the 45-49 age group.

The gap is not rooted in “a lack of participation on women’s part”, according to Laura Suter, head of personal finance for investment platform AJ Bell. “Looking at just auto-enrollment participation, women are consistently more likely to be paying into a pension than men.

“But once they hit their 40s and above, women significantly drop behind men in their pension savings. A lot of this will be due to women taking career breaks to have children, working part-time around caring responsibilities or the gender pay gap meaning they earn less – which all filters through to lower incomes and lower pension contributions.”

Statistically, women tend to live longer than men (according to ONS figures, the average life expectancy in the UK from 2018 to 2020 was 83 years for women and 79 years for men), which could further exacerbate the problem.

In a statement, pensions minister Laura Trott said that auto-enrolment had “brought millions of women into pension saving for the very first time”, but “while the participation gap has closed, the wealth gap persists”.

She added: “The publication of an official annual measure will help us track the collective efforts of government, industry and employers to close the gender pensions gap and ensure women can look forward to the retirements they’ve worked so hard for.” 

The pension gender gap, just like the gender pay gap, is rooted in structural issues. But if your pension is something that you’re always pushing to the back of your mind and treating it as a task for another day, the headlines might give you pause. 

“On the face of it, the tactics needed to build a decent pension fund are to start as early as possible, to put in as much as possible and to maintain contributions for as long as possible,” says Kevin Pratt, pensions expert at Forbes Advisor. “But none of this is easy in a cost of living crisis because the demands of the present tend to trump aspirations for the future.

“If at all possible, women – and men too – should contribute to their workplace pension from the get-go,” he recommends. “Someone in their 20s is putting their money to work for decades, so even modest contributions can bring healthy benefits in the long run.” 

“Perhaps most importantly, women need to find out as much as possible about their retirement prospects. Do they have an old pension from years back they need to blow the dust off and perhaps combine with other plans? Can they afford any additional contributions? Are there any gaps to plug in their National Insurance contribution records to ensure they get the maximum state pension? And what other provisions do they have to pay for their retirement?” It might be easy to shrug off as just another piece of admin, but some research now could pay off in the long run.

Images: Getty