Could an extra £35 a month close the gender pension gap?

Based on ONS projections and adjusting for inflation, the average pension pot for a man currently aged between 25-34 will be worth £142,836 at the State Pension age of 68, falling to a pot of £126,784 for women - a gender pension gap of almost 11%.

However the analysis from Fidelity International shows that women could close the gender pension gap by dedicating an additional 1% of their salary towards their pension early on in their careers. This is an average of just £35 per month in contributions over 39 years.

Fidelity International added that without action, it will take more than 200 years to close the gender pay gap.

Its report found that the barriers that stop women from investing include salary limitations, household costs and chores. A quarter (23%) said a reduction in household costs would help them to invest more each month and just under a third of women said that a salary increase would encourage them to invest, underpinning the fact that the gender pay gap is still a factor holding women back from taking more risk with their earnings.

A lack of trust and understanding when it comes to the investment industry is another issue. Over one in ten women do not feel at all comfortable choosing financial products and services – twice as many as men. More women than men described the way investment is communicated as ‘complicated’, ‘incomprehensible’ and intimidating.

Maike Currie, Investment Director at Fidelity International, commented: “Financial inequality is one of the greatest challenges we face today. We live longer, earn less and are more likely to take career breaks or work part-time. To unlock the financial power of women, we need to address the personal, professional and policy barriers stopping women from investing.

"On a personal level, women still shy away from risk and prefer the perceived safe haven status of cash. On a professional level, the investment industry needs to do more to build trust and an understanding of their products and services among women. Finally, at a policy level, we need to look at the way pensions are designed and question whether they take account of the unique life choices and challenges women face."