Women in their late 50s have just over half the pension savings of men, new research on the gender pensions gap by the Pensions Policy Institute suggests, offering three ways for policymakers to address this. A separate study about a fund in the Local Government Pension Scheme found large ethnicity gaps.

The paper by the PPI, published on Tuesday and sponsored by Marsh, said that the gender pensions gap is a societal issue, with the majority of pensioners in poverty being women. It comes as the Pensions Commission is still to produce its final recommendations, with the gender pensions gap emerging as a key issue. Earlier this month, TUC general secretary Paul Nowak called on the commission to deliver "a bold plan to close the gender pensions gap for good". 

The biggest detractor for women’s pensions is gendered working patterns (-39%), as a smaller proportion of women than men participates in the labour market and of those that do, a third work part-time. The institute noted that while childcare is a key factor in labour market inequalities, there is a lack of data on the factors and decision-making processes that perpetuate societal norms of gendered divisions of domestic labour.  

The other main factor leading to lower pensions for women is the gender pay gap (-19%), sometimes painted by pensions policymakers as an insurmountable obstacle, but the PPI suggests measures that could mitigate this. It lists as possible options:

While there are large impacts from working patterns and the pay gap, women tend to benefit somewhat (+12%) from being more likely to work in the public sector, which currently has more generous pension schemes. A small boost (+1%) also comes from the fact that women who are eligible to be auto-enrolled are less likely to opt out. 

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

Lizzy Holliday, director of government relations at Marsh, 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.” 

Gender gap reporting was recently introduced for funds in the Local Government Pension Scheme in England and Wales, showing vast differences between funds. 

A small number of Westminster City Council workers participated in a separate study by Pensions for Purpose, sponsored by the City of Westminster Pension Fund, Hymans Robertson and the LGPS Advisory Board, to look at pension gaps.  

Westminster’s gender pension gap is about half that recorded across the wider LGPS at 18.7%, compared with 34.7%. However, the gender gap was distributed differently among different ethnic groups: Asian women had accrued about 12.7% more pension benefits than Asian men and Black women 3.8% more than Black men, while White women had accrued 23.8% less than White men. 

Overall, scheme members from ethnically diverse backgrounds had accrued 30.3% less under the career average revalued earnings scheme than White members, a significant ethnicity gap. Men from ethnically diverse backgrounds had accrued 46% less than White men, while women from ethnically diverse backgrounds had accrued 30.2% less than White women.  

The study pointed out that the proportion of employees from ethnically diverse backgrounds increased from 31% in 2013-14 to 47% in 2025-26, arguing that many in this group have had less time to accrue benefits. 

On the more positive side, pension outcomes for disabled and non-disabled members were comparable with disabled members accruing 0.4% more under CARE.

Generation Z had the lowest pension participation rates, with 74% of Gen Z men participating in the scheme.

The research shows why pension savings gap research and analysis beyond pure reporting is needed, said Charlotte O’Leary, chief executive of Investors for Purpose.

“When taken together and looking at the interaction between and across gender, ethnicity, disability and generation, the picture becomes more complex and more nuanced reflecting a need to understand root causes and systemic impacts before setting policy,” she said. 

O’Leary said an LGPS-wide ethnicity benchmark would be “transformative”.  

SAB secretary Clair Alcock added: “What this groundbreaking research shows is that, if we are serious about understanding inequality in pension outcomes, gender alone is not enough. By examining ethnicity, disability and age alongside gender, the report begins to build the evidence base needed to drive meaningful change. I would encourage ministers to build on this progress by extending pension gap reporting to other protected characteristics and across all public service pension schemes.”