Women aged 55 to 59 have just 54 per cent of the pension wealth held by men of the same age, with differences in working patterns identified as the biggest driver of the gender pensions gap, according to research from the Pensions Policy Institute (PPI).

The PPI’s latest report, The Underpensioned: Updating the Gender Pension Gap, found that gendered working patterns reduced the median pension wealth of women aged 55 to 59 by 39 per cent compared with men of the same age, representing the largest negative factor identified in the analysis.

The gender pay gap was found to reduce women’s pension wealth by a further 19 per cent, while women’s higher representation in the public sector had a positive impact of 12 per cent, reflecting the comparatively more generous pension provision available in many public-sector schemes.

PPI said the findings demonstrated how inequalities accumulated throughout women’s working lives, with career breaks, part-time employment and lower earnings feeding through into retirement outcomes.

The report, sponsored by Marsh, also highlighted the wider social implications of the gender pensions gap, noting that women account for 57 per cent of pensioners living in poverty.

PPI senior policy analyst and report author, John Adams, described the gender pension gap as a "severe inequality" within the pensions landscape, with women remaining at "significant risk" of falling into pensioner poverty.

The findings come as the Pensions Commission considers broader questions around pension adequacy, fairness and sustainability ahead of its recommendations to the government.

Marsh director of government relations, Lizzy Holliday, said the findings showed how financial inequalities that built up over women’s working lives continued into retirement.

“Having around half the pension wealth of men at the same age reflects inequalities that build up throughout women’s working lives," she added.

“As policymakers and the Pensions Commission consider the future of the UK pensions system, closing the gender pension gap must be central to that conversation.”

Also responding to the findings, AJ Bell head of personal finance, Sarah Coles, noted that the impact of part-time work was a major contributor to the gap, particularly where women reduced working hours to accommodate caring responsibilities.

“The impact doesn’t fade away completely when they return to work either, because women still face the gender pay gap, which makes it far harder to build the pension pot they need for the retirement they want," she said.

Coles highlighted separate AJ Bell Money Matters research suggesting that the gender pensions gap begins to open up from the age of 28, while only 8 per cent of women prioritised retirement saving compared with 22 per cent of men.

She argued that reduced working hours could hit pension savings in two ways: some women would contribute a percentage of a smaller salary, while others would stop contributing altogether because of financial pressures.

Coles also pointed to the continuing gender pay gap after women return to full-time employment, citing figures showing women working full-time were paid an average of 6.9 per cent less than men.

She stressed that the gap increased with age, reaching 12.5 per cent among workers in their 50s, further reducing the amount women were able to contribute to pensions and compounding the difference over time.

“That’s a sizeable difference in take-home pay, but it also means that women are paying less into their pension each month, which has a snowball effect on their pot over time,” she added.

Coles warned that lower pension wealth could leave women particularly exposed following divorce, separation or bereavement, while single women may have fewer household resources to fall back on.

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