Top News

The Government is facing fresh calls for reform as one group of Brits are retiring with half the cash of others.

Women nearing retirement are sitting on just half the private pension wealth of men - prompting fresh demands for a shake-up to tackle what campaigners call a "motherhood penalty". A stark warning from the Pensions Commission reveals that women approaching later life have median pension savings of £81,000, compared with £156,000 for men.

The government-backed body is now urging ministers to act, warning that failure to close the gap risks fuelling pensioner poverty and piling pressure on public finances.

The commission said tackling the gender divide would be central to its work on the long-term future of Britain's retirement system. It cautioned that the imbalance is "not only a matter of fairness" but could leave many women financially exposed in old age.

Analysis underpinning the report points to a clear pattern: women's pension contributions stall after having children.

Research by the Institute for Fiscal Studies found women typically contribute around £30 a week into pensions before their first child - a figure that remains unchanged even six years later.

By contrast, men's contributions rise sharply over the same period, doubling from roughly £30 a week to more than £60.

This widening gap is compounded by the fact that women are far more likely to work part-time or step away from the workforce entirely due to caring responsibilities - often missing out on automatic enrolment into workplace pension schemes.

The commission warned Britain has one of the largest gender pension gaps in the developed world - ranking second worst among OECD nations, behind Japan.

This is despite men and women now receiving broadly similar state pension outcomes at retirement age.

Lady Jeannie Drake, who chairs the commission, told the Guardian: "The evidence is clear. Women are approaching retirement with half the pension wealth of men, and without further action, this difference will persist.

"The gender pensions gap is not simply a reflection of the pay gap, it is shaped by a system that has not yet fully accounted for the realities of many women's working lives."

The commission said solving the problem will require a "joined-up approach" - combining pension reforms with wider changes to the labour market, including better access to childcare.

It is expected to examine potential policy fixes ahead of a full set of recommendations next year.

The body itself was originally set up under Tony Blair in 2002 and revived last year by Sir Keir Starmer amid fears that today's workers could be poorer in retirement than current pensioners.