Pension warning: Women urged to consider 4 'crucial steps' to boost retirement income as they face £7k annual shortfall

New analysis from Almond Financial paints an even bleaker picture for the future. Based on current trends, it could take until 2114 for the gender pension gap to close completely - a 90-year wait from 2024.

This prolonged timeline means many people alive today may not see gender pension equality in their lifetimes, raising urgent questions about the underlying causes and potential solutions.

The gender pension gap is driven by several deep-seated structural issues.

The gender pay gap plays a significant role, as women naturally have less to save when they earn less. Women are also more likely to work part-time and take career breaks due to caring responsibilities.

According to Scottish Widows, there is currently a 39 per cent gender pension gap, which grows wider over an average woman's working life.

Jill Henderson, Scottish Widows Head of Business Development, explained: "Childcare is a huge contributing factor for women, often resulting in them giving up work or reducing their working hours to look after their family."

Around 63 per cent of mothers have either reduced their working days or not yet returned after parental leave, compared to just 16 per cent of men.

The impact is particularly severe for single, divorced, or single mothers. As Henderson noted: "Those women who are in a relationship fare better, but those who are single, divorced or are single mothers are most vulnerable."

The impact of the gender pension gap on women's retirement prospects is significant. Scottish Widows' latest Women and Retirement report revealed that a third of women are not on track to achieve even a basic lifestyle in retirement.

This means many women won't have the funds to live comfortably or pursue retirement goals such as travel and hobbies.

The average woman is set to receive £12,000 per year in retirement income, compared to £19,000 for the average man - a £7,000 difference. This figure includes private pensions, long-term savings, inheritance, and state pension or pension credits.

For the average woman to level out this disparity, she would need to pay an additional £96 every month over her working life.

To address the gender pension gap, experts suggest several strategies for employers.

Sam Robinson, Principal Financial Adviser at Almond Financial, recommended that women should enhance their pension contributions beyond the statutory three per cent of annual salary.

"Introducing a contribution match scheme can encourage employees to save more for their retirement," Robinson said.

Encouraging shared parental leave is another crucial step.

By promoting this policy and urging men to take their full entitlement, companies can support women in returning to work sooner with full pay.

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Improving maternity pay is also vital, as insufficient packages can severely impact women's earnings and retirement savings.

Lastly, Robinson advised introducing company share schemes for all staff, regardless of position.

He said: "This opens the door to significant levels of income that can transform lives and the ability to save towards retirement."

These measures aim to accelerate progress towards pension equality, potentially reducing the projected 90-year wait.