Much of the debate about gender inequality focuses on pay, not pensions. Lord Adair Turner talked about the gap between men and women in his government-sponsored report on pensions. Ministers have also mentioned it during the debate about how to solve the pensions crisis. But most of their attention has focused on the state pension, where women lose out from the system rather than the lack of private saving.

In some ways, it’s forgivable. When the then US Defence Secretary Donald Rumsfeld famously analysed the situation in Iraq, saying: ‘There are known knowns, there are things we know we know. We also know there are known unknowns,’ he might have been talking about pensions.

The calculations are fiendishly difficult and estimates of what people need to save to gain a specific retirement income are based on predictions of what might happen to inflation, interest rates, investment returns, tax rules and many other variables in 20, 30 or 50 years’ time.

Some help came in the form of a report last month from Scottish Widows. The study looked at current savings and found that almost one-in-three women have no pension provision and half of all women saving for retirement stopped after they had children.

Caring for children and elderly relatives also meant women were more likely to be found employed in lower paid and part-time work.

The report said the situation was unlikely to change when 37% of women worked full time, compared with 60% of men. High divorce rates also contribute to a woman’s financial burden and push retirement saving to the bottom of the pile.

As a result, men save, on average, £199 a month, while women save £128. The result can be a difference in private income.

Women who are self-employed, along with those who spend long periods caring for others, are among the hardest hit, according to the study, which was produced with the support of the Equal Opportunities Commission. Self-employed people often live hand-to-mouth and save only a little along the way. Self-employed women are even worse at saving. Either they are young – and like many young people don’t think about the requirements of old age – or they care for children without the benefit of maternity leave. Consequently, they rely on their male partner to carry out the bulk of the family saving.

Scottish Widows, like all investment companies, believes women should take more control of their lives and extend that control to their retirement saving. Too many family budgets, it argues, are built around women putting aside their own financial needs. They need to set up a pension and start making regular payments as soon as possible.

However, the government’s plans to reform the state pension system and the introduction of a new private saving scheme of personal accounts, have made people think whether the failure to save is not just an emotional response to the situation, but also a rational one.

Women will benefit greatly from the new scheme, giving them credits for caring and, therefore, allowing more of them to qualify for the full basic state pension. Without any private saving they will also qualify for means-tested benefits. And not only is there the pension credit, but also council tax benefit, housing benefit and a number of other benefits, including free or subsidised training courses to give them new skills to return to work. With private saving, they could lose all that.

Saving in any pension, even the government’s low-cost personal accounts (due to take effect in 2012), will need to be significant to take savers above means testing. A halving of projected investment returns since the mid-1990s, and a halving in annuity rates over the same period, has cut pension incomes by three-quarters.

Means-tested benefits may sound like the preserve of the poor, but their generosity, at least in British terms, will trap many women.

The latest reforms from the government are expected to restrict the number of claimants to 40%, but that is still a significant number and advisers will be forced to tell many women they could be better off saving into something more flexible rather than a pension.

Saving grace

Persuading women to start saving for retirement early on is often difficult, especially if they are primary carers. Surveys suggest a ‘Prince Charming’ syndrome still prevails: one-in-five women between 18 and 34 assume their partner will provide for them in old age, despite the high rate of failed relationships and the cost of divorce, which can deplete the incomes and savings of both parties.

A YouGov/Thomas Charles survey reveals that debt is worse than the national average among divorced and separated people (33%) and above the national average of 21% for women (26%). The cost of divorce adds to the burden. The average cost of a divorce has crept up to around £15,000, according to Norwich Union, with some reaching as much as £60,000.

About one-third of couples sell the family home to fund their divorce; others dip into their bank accounts. The rest, mainly women without cash or assets, borrow from credit cards or have unsecured loans.

If women were told these stark realities, they’d be more likely to put aside some of today’s income, or their husband’s, for their own retirement.