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Women won't reach pension parity until 2028

Women in the UK will not reach the same pension savings as men until 2028, according to a Freedom of Information request from pension consultancy Broadstone.

In 2021, women accrued £52 billion in pension savings - including a £4.3 billion of tax relief on their pension savings - up 55% from 2009.

Men saved £62.6 billion towards pensions in the same year, accounting for a £6.5 billion tax relief, representing a 22% increase during the same time period.

Women tackling the gender pension gap:

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Higher retirement age increases rate of pension poverty

When comparing Compound Annual Growth Rates (CAGR), women's pensions grew in value almost three times as much as men's - 4.6% growth compared to 1.8%.

If the rate of growth for both remained steady, women's annual pension contributions would match that of men by 2028, with both saving around £71 billion per year.

Rachel Meadows, head of pensions and savings at Broadstone, said auto-enrolment pensions are inadvertently putting women at a disadvantage.

Speaking to HR magazine, she said: “Significant research has been conducted on the UK’s vast gender pensions gap with some estimates suggesting that women are entering retirement with hundreds of thousands of pounds less in their retirement pots than men. The causes behind this gap are multifaceted across demographic differences and labour market factors.

"Women are more likely than men to spend time out of work, and are therefore contributing less to pensions and impacted by the gender pay gap. The design of auto-enrolment and its implementation by employers can also penalise women – even if unwittingly – by disadvantaging those in lower paid jobs and second jobs where women make up a higher proportion."

A disparity in working hours between men and women may be helping to widen the pension gap between the two.

Research from think tank Phoenix Insights earlier this month showed only 34% of women have considered the impact reducing working hours could have on their pension contributions, compared to 62% of men. 

Strong flexible working practices is one way employers can help close the gap, but there's more they can do, Meadows argued. 

She added: "Employers should also be looking at incorporating broader financial wellbeing support into their benefits offering to include sessions that highlight the importance of pension saving throughout the workforce, and support women in their financial planning. Mental and physical wellbeing is another important area and employers can help support women through issues like menopause which can contribute to reduced hours or an exit from the labour market.

"Any steps that contribute to keeping more women in the labour market for a longer period of time will drive a more diverse, productive place of work. It will support women in closing the gender pensions gap quicker, and help them secure financially strong retirement outcomes, increasing their quality of life in retirement."