Research of more than 4.5 million members across L&G’s defined contribution (DC) clients in the UK revealed that the gap between men and women’s retirement remained consistent between 2020 and 2021.
However, the research also uncovered women are at a significant disadvantage at every stage of their careers, with the gap gets increasingly bigger as women approach retirement.
The gap starts at 16% for women in their 20s, gradually increasing across the age groups, hitting 51% by the time women have reached their 50s. Upon retirement, the gap has only increased to 55%.
Source: L&G
L&G analysed the pension pots of more than 50,000 retirees in the UK in 2021 and found on average, a man’s pension pot was £26,000, compared to £12,000 for a woman, indicating that on the current trajectory, the current pension gap will remain at these levels unless “significant action” is taken.
L&G’s findings come on the back of a report published earlier this month from Now Pensions that highlighted the growing disparity in the pension gap between men and women.
Similarly, both the Trade Union Congress and Hymans Robertson have both urged the government to take action.
L&G commercial director of workplace savings Katharine Photiou said: “There are many factors that have led us to this point but very few solutions offered. It is time women stop being penalised for things outside of their control, like the high cost of childcare, or being paid less than their male counterparts.”
Co-head of DC Stuart Murphy added: “These figures demonstrate the glacial pace of change on the gender pension gap, as well as the need for greater cross-industry collaboration between government, employers, pension fund providers and members to address the scale of the challenge.
“We are calling for full disclosure from companies and DC pension providers to publicly share their gender pension gap so that we can better identify and fix this problem.”
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