The gender pension gap has narrowed to 1%, but the pay gap and part-time working ratio mean women are still saving less per year than men, according to Scottish Widows.
The insurer’s Women and Retirement Report revealed the gender pension gap has reached its narrowest level on record, with almost three in five (59%) women now saving adequately, compared to 60% of men.
Despite this, women saving adequately on the median wage are still saving £1,300 a year less than men due to an overall pay gap and part-time working ratio.
This means for a woman to save the same amount into her pension as a man, she will need to work an extra 37 years, which would take her over the age of 100 if retiring at state pension age, a number that Scottish Widows suggests is likely to grow as the full economic impact of the coronavirus pandemic is realised.
The report also showed young women are among those struggling most to save for later life, with less than half (46%) of those in their 20s saving the recommended minimum, compared to 54% of men the same age.
It also said men in full-time jobs earn on average £6,100 more a year than women in full-time jobs, while commitments such as childcare also tend to reduce women’s working hours and therefore earnings.
Managing director of workplace savings Jackie Leiper said: “While we’re heartened at the record levels of saving, there’s still a mountain to climb before we reach true gender pension parity.
“Women face decades of extra working before they’ll have a pension to match that of a man’s, which is unfair and unacceptable. Until we can resolve structural inequalities, from the gender pay gap to the uneven division of labour at home, we will never have pension equality.”
She added: “In a matter of months the pandemic is reversing years of progress. We’re calling for urgent pension reforms that will help more women save more for retirement, including improved childcare provisions, enhanced pensions for those on maternity leave, the inclusion of pensions in divorce proceedings, and the scrapping of the auto-enrolment minimum earnings threshold.”
Royal London suggested if the gender pensions gap is to be fully resolved, the government must address childcare issues.
Pension specialist Helen Morrissey said: “Any narrowing of the gender pension gap is to be welcomed but we can’t ignore the fact that the system remains hugely stacked against women.
“Retirement prospects are damaged as soon as women leave the workforce to carry out caring duties and the lack of affordable childcare means many women are unable to plug the gap. This is an issue government must tackle urgently if this situation is to be resolved.”