gender pay gap
DWP data revealed that women who are at the age of 55 receive a pension that is one-third less than the private pension of men. Hyejin Kang/Shutterstock

On Monday this week, a Department for Work & Pensions (DWP) report revealed that the current gender pension gap in the UK remains at 35 per cent. The gender pay divide has stood at 35 per cent since an investigation into equal pension pay in 2018.

The 'gender pension gap' defines the different retirement outcomes for men and women and investigates the specific amount of pension wealth given to men, in comparison to women.

The official DWP data showed that women who are at the age of 55, around the minimum pension age, receive a pension that is one-third less than the private pension a man would receive.

People who have zero pension wealth were excluded in the report.

DWP report reveals that the current gender pension gap in the UK remains at 35 per cent.

Laura Trott, the Minister of Pensions who called for an investigation into the gender pension gap said: "The publication of an official annual measure will help us track the collective efforts of government, industry and employers to close the gender pensions gap and ensure women can look forward to the retirements they've worked so hard for."

Laura Myers, a member of LCP's gender pension gap working group, called the publication of the statistics "a vital step in tackling profound gender equalities in pensions".

Myers added: "Not only does this report put the issue [on] the government's agenda, but it means we will be able to hold governments to account to make sure that progress is made on the yawning gap in pension rights between men and women."

She also warned: "The gap in DC pension rights between men and women is steadily growing, and risks replicating the inequalities we saw in the Defined Benefit world."

In 2021, nearly £52 billion was paid into the private pensions of women who are entitled to automatic enrolment, compared to the £62.6 billion that was paid into the private pensions of men.

The Women's Budget Group recalled that although women populate most of the part-time workers in the UK, they still "account for 69 per cent of low earners, a proportion that has barely changed since last year (70%) and that has remained consistent since 2011 (69%) when measured as earnings below 60 per cent of full-time weekly earnings".

Between 2008 and 2020, the average pension wealth for women increased by £44,000 – from £50,000 to £94,000.

Whereas for men, the average pension wealth increased by £60,000 – from £85,000 to £145,000.

The government and other pension professionals have blamed the wealth contrast on maternity leave, in other words, women "taking career breaks". The government also noted that the gender pension gap is caused by women making up most part-time workers.

Alice Guy, the Head of Pensions and Savings, spoke out about women inherently moving into part time work after having children. She said: "If women have children, the odds are stacked against them as some of the highest childcare costs in Europe combined with an increasing gender pay gap, make it harder for them to build pension wealth."

She argued that women "often bear the brunt of childcare and household chores", which ultimately lands them in part-time job roles.

The Managing Director at Standard Life, Gail Izat, declared: "The gender pension gap is still way too high – we simply shouldn't still be seeing such a huge discrepancy between men['s] and women's retirement savings as we move towards the mid-2020s."

To bridge the gender pension gap, the UK Government have proposed legislation that sets out to remove the lower earnings threshold, in order to allow contributions to private pensions from the first pound of earnings.

This legislation would allow women, who make up most of the workers that earn less than the current £10,000 starting position, to invest in their retirement fund early.

"Hopefully the bill moving through parliament to legislate for this passes, and is swiftly implemented," Gail Izat concluded.