Bringing in “family pension pots” could help to close the gender pension gap, a report has suggested, with women particularly at risk after retirement.

An estimated two in five women and one in three men are potentially heading towards retirement poverty.

Joint financial planning is needed, so that women do not lose out in the event of a divorce or when retirement annuities – which give the annuity holder an income for the remainder of their life – are bought, according to Scottish Widows' findings.

"Men tend to have bigger pension pots, to be older and to die at an earlier age than their spouses, which means many women lose a significant source of their retirement income when their partner dies," the report said.

It suggested that family pension pots could help to overcome some pensions gender inequalities.

They could see a couple selecting their pension provider and workplace pension contributions collectively going into the same pot.

"If the couple were to get divorced the plan would be split between the two automatically," says the report.

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The current situation often sees annuities purchased for only one partner, which is then lost on their death.

Jackie Leiper, managing director, Scottish Widows, says: “Without further action, the gender pensions gap will never close.”

Researchers estimated that 42% of women risk facing poverty in retirement, compared with 35% of men.

The forecast took into account a set of retirement living standards defined by the Pensions and Lifetime Savings Association (PLSA), as well as expenses such as housing costs for those who expect to rent or continue to pay off a mortgage in retirement.

Those deemed by Scottish Widows to be at risk of poverty in retirement could potentially have a retirement lifestyle that falls below the minimum standards as defined by the PLSA.

The Women and Retirement Report from Scottish Widows has been tracking women’s retirement savings for two decades.

Only 38 per cent of women invest outside pensions, in assets such as shares and property, compared with 55% of men, researchers found.

Among young women aged 18 to 24, only 34% invest, compared with 64% of men in the same age group.

Various surveys were carried out for the report, including a YouGov survey among more than 5,100 people across the UK in March and April 2024.