Government-backed Pensions Commission calls for action on gender savings gap

A shake-up of pensions in Britain must involve measures to close the gap in retirement savings between men and women, the revived Pensions Commission is to tell ministers.

According to the government-backed body, women approaching retirement have on average half the private pension savings of men, with a median pension wealth of £81,000 versus £156,000.

The commission, which is expected to publish its interim report on the long-term future of the retirement system this week, said it would look at how the government could cut the gender pension gap as part of its work towards a final report with recommendations, expected next year.

It said closing the gender gap in private retirement wealth was “not only a matter of fairness” but also that failing to do so risked fuelling a rise in pensioner poverty and damaging government finances.

First established under Tony Blair’s government in 2002, the Pensions Commission was revived by Keir Starmer last year, amid fears that a crisis in saving for retirement could mean today’s workers will be poorer in later life than the current crop of pensioners.

The commission said closing the pensions gender gap was ‘a matter of fairness’. Photograph: Acorn 1/Alamy Stock Photo

The relaunched commission is led by Jeannie Drake, who was a member of the original Blair-era panel, working alongside Ian Cheshire, the former chair of Barclays UK, and Nick Pearce, a professor of public policy at the University of Bath.

Its interim report will draw on data commissioned by the Institute for Fiscal Studies that says women suffer a “motherhood penalty”, as their pension contributions typically flatline after childbirth.

The IFS found that women contributed about £30 a week on average to a pension before having their first child – a level that remained unchanged six years later.

For men, however, savings rates grew from about £30 a week to more than £60 a week on average over the same time period.