How women can close the 35% “gender pensions gap”

In June, the Department for Work and Pensions (DWP) released new data concerning the disparity between male and female pension provisions.

The difference between the two, known as the “gender pensions gap”, demonstrates the percentage division in uncrystallised pension savings between men and women.

According to the most recent data from 2018 to 2020, the gender pensions gap is now at 35% in favour of men. That means women are typically worse off than their male counterparts when creating a savings fund for retirement.

While FTAdviser notes that this is an improvement from the 42% gap recorded between 2006 and 2008, it still represents a rift in retirement savings that means women will typically have less in their funds in later life.

So, find out why there is a gender pensions gap, and what women can potentially do to reduce the disparity and build suitable retirement savings.

Taking time off work to raise a family can affect women’s pension savings

While there are various factors at play that have created the gender pensions gap, there are two major elements that are seemingly the most influential.

The first is that women typically have lower earnings than men. Figures from the Office for National Statistics (ONS) show that while the gender pay gap is falling, it was still sitting at 14.9% in 2022 when data was last gathered.

As a result, even if they pay the equivalent proportion of their salary into their funds as men, women will not save the equivalent amount into their pensions overall on average.

The other significant factor is the career break many women take when having children. By having time off work to care for their families, women miss out on crucial years in which men who remain in work increase their earnings, and their pension contributions as a result.

Data also shows that women’s earnings often do not recover when they do return to work after having children, either – according to, more than half of women who return to work after having children earn less than they did before they took time out.

Aviva research carried out last year shows how the gap in pension contributions changes around the time that women make “milestone career and childcare decisions”. Their findings show that while the gap remains between 13% and 16% from ages 20 to 34, it suddenly widens to 18% for the age bracket between 35-39.

This reaches 29% in the 45-49 range, and is 40% by the time individuals may be thinking about retirement between ages 55 and 59.

That said, while this all seems negative, it’s worth noting that some successful changes have been made to improve the distance of the gender pensions gap.

For example, the introduction of auto-enrolment – that is, employees being auto-enrolled into a workplace pension when they start working for a new employer – has reduced the gap, with FTAdviser reporting that the gap among people who are auto-enrolled is 32%.

However, this still means that women are at a notable disadvantage upon reaching retirement. As such, there’s still some way to go to achieve parity.

There are plenty of steps women can take to boost their funds

Realistically, due to the reasons that it exists, it would take structural change to address the gender pensions gap entirely.

Still, while women are typically at a disadvantage and it might be difficult to build a fund that closes the gap, women still have plenty of options to explore that could help to improve their personal pension savings.

Here are a few things women could consider doing.

Save from the start of your career

Firstly, it’s key to save into a pension from the very start of your career.

Figures from PensionsAge show that if a 25-year-old on average earnings and contributing the minimum auto-enrolment amount to their pension paused contributions for a year, this could translate as a missing £4,600 in their fund by the time they reach State Pension Age.

A two-year pause added up to a missing £9,100, rising to £13,600 for three years.

So, treating a pension as a priority from the very start of your career can certainly be valuable, providing a strong bedrock for your savings.

Maintain and increase your pension contributions over time

While auto-enrolment has helped to partially reduce the gap, it also leads many individuals to only make the minimum contribution – typically 5%, made up of 4% of your salary and 1% tax relief – to their pension.

Meanwhile, increasing pension contributions as your earnings rise can be instrumental in providing you with a larger pot down the line.

Additionally, if your earnings take you into a higher tax band, you may be able to claim a higher rate of tax relief on a portion of your contributions.

Your employer may also match your contributions and provide more than the standard 3% if you do this, too.

Discuss pension saving with your partner

Perhaps the most useful step you can take is to discuss pension savings with your partner if you have one.

For example, if your partner is continuing to work while you’re taking time off to care for your children, they could contribute to your pension for you instead. This could be on top of their own contributions, or they could divide what they would usually pay across both your pots.

This way, it could help to reduce the gap between your two funds and ensure that you are not financially penalised for a career break while caring for your children.

Get in touch

If you’d like to find out how to make the most of your pension, please do get in touch with us at Rosebridge.

Email or call 01204 300010 to speak to an experienced adviser.

Please note

This blog is for general information only and does not constitute advice. The information is aimed at retail clients only.

A pension is a long-term investment. The fund value may fluctuate and can go down, which would have an impact on the level of pension benefits available. Your pension income could also be affected by the interest rates at the time you take your benefits.


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