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While many are all too familiar with the gender pay gap, the gender pension gap gets a lot less coverage but is, unfortunately, a reality for many women. Now, warnings are being issued around the gap, with many calling on the government to do more as women live longer with smaller pensions.

At The Salary Calculator, we’ll walk you through and explain:

• What the gender pension gap is
• How the gap has widened
• How to navigate the gender pension gap

What is the gender pension gap?

The gender pension gap refers to the percentage difference in pension income between female and male pensioners. According to research from Legal & General, the gap is 17% at the beginning of a woman’s career, reaching 56% at retirement when compared to men.

Moreover, the average pension pot of a woman is less than half that of a man’s, and the gap even penetrates female-dominated industries.

Research from Prospect outlines that some of the reasons behind the gender pension gap include:

• An imbalance in the level of occupational and private pension saving between men and women
• The gender pay gap
• Indirect gender discrimination
• Women taking breaks or reducing hours to look after family

This imbalance, of women having to work 14.5 more years to access the same pension savings as men, occurs despite women contributing more of their income to pension savings.

Research from SunLife’s survey also found 30% of women hope to depend on their partner’s pension when they get older. However, this doesn’t take into account potential separation, divorce or early widowhood. On top of that, when it comes to divorce, research shows that three in five divorcees fail to bring up pensions when discussing their financial settlement.

Commenting on the inequality relating to pensions, Juan Yermo, Chief of Staff to the OECD Secretary-General, said: “Still today, the design of retirement savings arrangements sometimes disadvantages women compared to men, for example when eligibility criteria based on working hours or earnings restrict plan access, when contributions stop during periods of maternity leave, or when women do not get their share of retirement benefit entitlements upon divorce.”

How has the pension gender gap widened?

The pandemic has, unfortunately, worsened an already dire situation. Research from More2Life and the Centre for Economics and Business Research outlined that during the pandemic, the gap widened to £184,000 in 2021. That was £26,000 more than the previous year.

The study also found that 30% of women had found their financial situation worsened, impacting their ability to save; comparatively, 24% of men agreed.

More2Life said that the research revealed 62% of women worried about being able to “pay enough into their pension” compared to 57% of men.

How to plug the pension gap

Many pension experts and organisations are calling for government intervention to plug the pension gap.

Some of the recommendations made by Prospect include:

• Introducing a statutory requirement for the government to report to Parliament on the gap and outline plans for closing it
• Commencing an inquiry by the Work and Pensions Committee into the gender pension gap
• Implementing changes to the tax system to address and resolve the ‘net pay anomaly’, which means low earners “do not benefit from tax relief on their contributions.”

While these recommendations, if implemented, could be fruitful, change isn’t going to happen any time soon, and in the meantime, there are ways that you can safeguard your future.

Helen Morrissey, senior pensions and retirement analyst at Hargreaves Lansdown, outlined there are steps that women can take: “It’s not too late to make a difference to your pension value by continuing to contribute after the age of 55. You should also check with your employer to see if they will match any further contributions as this can give your retirement planning a real boost.”

It’s a good idea to check in on your National Insurance contributions and review whether there are any gaps to ensure you’re eligible for the full state pension. Also, plan ahead of time, and if possible, pay into your pension if you take maternity leave.

If you’re planning on taking a career break for another reason, it’s wise to top up your pension, too, as a way of compensating for any losses.

Ultimately, saving as soon as possible is a wise plan because even if you contribute a small amount to your pension each year, you can make full use of compound interest.