Women have up to 45% less income at retirement than men

Barnett Waddingham’s report, which analysed around 35,000 members of seven defined contribution schemes, showed that not only are women disadvantaged within their own pension fund but are more likely to fall behind on pension contributions by 10 per cent if they take a career break.

Further, the study showed that another underlining reason as to why women are disadvantaged is that men are more likely to earn a higher salary.

The gender pension gap begins to grow in savers' early 30s; after age 32, men will usually contribute up to around £500 a year more compared with women, despite contributing the same percentage in salary.

When salaries rise, the difference becomes more apparent, with men paying up to £1,500 a year more than women. Not only do women have a lower pension pot at retirement but there is also an underlining difference in gender pay gap, the analysis showed.

Barnett Waddingham’s report also stated that the design of the auto-enrolment system also disadvantages women.

The survey concluded that a higher proportion of women than men earn less than the auto-enrolment threshold of £10,000 a year — and in some schemes, there are up to three times more women under this threshold.

Pensions Expert reported on research published by Prospect earlier this month, which showed that some 770,000 men work part-time compared with 3.2m women. Although women working part-time tend to contribute more towards their pension than men, the result is that women are still disadvantaged.

Amanda Latham, policy and strategy lead at Barnett Waddingham, says that while society has evolved in gender equality, the pensions system does not seem to have progressed at the same pace.

“The driving force behind the gender pension gap is clearly the gender pay gap, especially in the high-affluence group.

“The disparity in income is causing a knock-on effect on pension wealth, despite, by and large, women contributing the same proportion of their salary to their pension as men."

In response to these issues, Latham suggested three ideas to close the gender pensions gap.

The first was for women to pay in more into their pension after career breaks. Increasing auto-enrolment contributions would help close the gap, which would be cheaper than making up the shortfall at retirement.

The second was to use pay rises as an advantage to contribute more to their pension, as it will improve savers’ chances of an equitable retirement.

Lastly, if saving as a pair, individuals should consider contributing more to one person's pension scheme if it offers better benefits, lower charges and is more tax-efficient to do so.

Parents should consider sharing parental leave, with pension contribution shortfalls split more equally across both parents.