Women aged 55-59 have around half (54%) the pension wealth of men of the same age, according to new research from the Pensions Policy Institute.
The PPI report, sponsored by Marsh, highlights labour market inequalities as the primary cause of the gender pension gap.
When compared to men of an equivalent age, the research revealed gendered working patterns lower the median pension wealth of women aged 55-59 by 39%, the largest negative impact identified.
The analysis, ‘The Underpensioned: Updating the Gender Pension Gap', also showed the gender pay gap creates a further 19% reduction.
The study noted that the comparatively higher proportion of women working in the public sector has a 12% positive impact to the average pension wealth of women aged 55-59, relative to men of the same age.
Published during Pensions Awareness Week, the report highlighted that the consequences of the gender pension gap extend beyond women’s individual financial security, with significant wider societal and economic implications.
They include increased pressure on the social welfare system as rates of poverty among older people rise, with women accounting for 57% of pensioners living in poverty.
John Adams, senior policy analyst at the PPI and author of the report, said: “The gender pension gap has become a severe inequality within the pensions landscape, with women remaining at significant risk of falling into pensioner poverty.”
Lizzy Holliday, director of government relations at Marsh said: "Having around half the pension wealth of men at the same age reflects inequalities that build up throughout women’s working lives. As policymakers and the pensions commission consider the future of the UK pensions system, closing the gender pension gap must be central to that conversation.”
The report was sponsored by now:pensions, which is now part of Marsh following its acquisition.
• The calculation of the gender pensions gap was based on analysis of the Wealth and Assets Survey Round 8. It is the calculation of the median amount of pension wealth held by women age 55-59 as a proportion of the median amount of pension wealth held by men age 55-59, allowing only for men and women with some pensions wealth.