Women are retiring with far smaller pension pots due to structural inequalities, a new report has found.

It warns that the current pensions gap sees men accumulating 75% more in their pension pots by age 60 than women.

The report, from the University of Edinburgh, supported by Evelyn Partners, calls for an overhaul of pensions policy and financial advice to address the pensions gap.

It has urged the financial services sector to recognise the hidden systemic, social and situational factors preventing women from saving and planning for later life, rather than focusing on their perceived ‘lack of confidence’ in Financial Planning.

Nearly 15m people in the UK are not saving enough for retirement, according to the DWP, signalling a system-wide engagement crisis - and women are disproportionally affected, the report says. The DWP figures show that men hold a median amount of £75,000 in DC pension wealth - the most common type of private workplace pension - by age 59, compared to just £19,000 for women.

Office of National Statistics figures show that women on average spend an extra hour a day on visible childcare and housework, and carry out 73% of cognitive labour – the mental load of organising family life - compared to their male partners, related research has found.

The author of the report entitled ‘It’s Not About Confidence: The Hidden Forces Shaping Women’s Financial Futures’ is Emily Shipp, a psychologist and associate of the Edinburgh Futures Institute (EFI). She said: “For too long, the ‘confidence gap’ narrative we see in financial advice and media reports has masked the real systemic, situational and social factors that result in the pensions gulf. 

“Historically, financial advice and pensions policy have centred on typically male, linear career trajectories and financial goals, rather than the multi-phase, care-interrupted lives many women navigate.

“Redesigning pensions policy and financial environments to better serve more varied priorities and life courses would better serve all genders as we move towards longer, multi-phase lives.”

Recommendations included in the report:

Systemic

•          Value unpaid care by applying carers’ pension credits above existing state pension earnings

•          Design DC pensions that do not compound care-related contribution gaps

•          Assess the gender impact of Pensions Commission proposals and Targeted Support

Social

•          Drop the ‘confidence gap’ narrative

•          Normalise non-linear working lives

•          Show examples of women taking the lead on long-term financial planning 

Situational

•          Protect unhurried time for long-term planning

•          Increase diversity among financial advisers

•          Promote women’s long-term financial needs within joint advice

Self

•          Shift from knowledge to informed action

•          Scaffold self-efficacy through achievable steps

•          Create personal, actionable paths to the future

The report was produced by the Compassion in Financial Services Hub (CFSH) at Edinburgh Futures Institute, supported by Edinburgh Innovations, the University of Edinburgh’s commercialisation service.

To read the report visit eil.ac/WomensWealth