A commission said tackling the divide would be central to its work
The Government is facing mounting pressure for reform as one group of Britons are heading into retirement with half the pension savings of their peers.
Women approaching retirement age have just half the private pension wealth of men – sparking renewed demands for an overhaul to address what campaigners describe as a “motherhood penalty”. A stark warning from the Pensions Commission reveals that women nearing later life have median pension savings of £81,000, compared with £156,000 for men.
The government-backed body is now urging ministers to take action, cautioning that a failure to bridge the gap risks deepening pensioner poverty and placing further strain on public finances.
The commission said addressing the gender divide would be at the heart of its work on the long-term future of Britain’s retirement system. It warned that the imbalance is “not only a matter of fairness” but could leave vast numbers of women financially vulnerable in old age.
‘Motherhood penalty’ hits savings
Analysis supporting the report highlights a clear trend: women’s pension contributions stagnate following the birth of their first child.
Research by the Institute for Fiscal Studies found women typically contribute around £30 a week into pensions before their first child – a figure that remains unchanged even six years later.
By contrast, men’s contributions climb sharply over the same period, doubling from roughly £30 a week to more than £60. This growing disparity is further exacerbated by the fact that women are considerably more likely to work part-time or leave the workforce altogether due to caring responsibilities — frequently missing out on automatic enrolment into workplace pension schemes.
UK among worst performers
The commission cautioned that Britain has one of the largest gender pension gaps in the developed world, ranking as the second worst among OECD nations, behind only Japan.
This is in spite of men and women now receiving broadly comparable state pension outcomes upon reaching retirement age.
Lady Jeannie Drake, who chairs the commission, told the Guardian: “The evidence is clear. Women are approaching retirement with half the pension wealth of men, and without further action, this difference will persist.
“The gender pensions gap is not simply a reflection of the pay gap, it is shaped by a system that has not yet fully accounted for the realities of many women’s working lives.”
Calls for ‘joined-up’ reforms
The commission stated that tackling the issue will require a “joined-up approach” — combining pension reforms with broader changes to the labour market, including improved access to childcare.
It is anticipated to explore potential policy solutions ahead of a full set of recommendations due next year.
The body itself was originally established under Tony Blair in 2002 and was revived last year by Sir Keir Starmer amid growing concerns that today’s workers could find themselves worse off in retirement than current pensioners.
