The Gender Pension Gap: Why Women Retire Poorer

Let's talk about something that makes me angry: women retire with pension pots 40% smaller than men's.

That's not a small difference. That's the difference between comfort and struggle.

The Numbers Are Stark

Average pension pot at retirement:

• Men: £212,000
• Women: £127,000

That £85,000 gap translates to roughly £4,000 less income per year in retirement.

Why Does This Happen?

1. The Pay Gap Compounds

Women earn less over their lifetimes:

• The UK gender pay gap is still around 15%
• Lower earnings = lower pension contributions
• Lower employer matches
• Less to save overall

2. Career Breaks Hit Hard

Taking time out for children or caring responsibilities:

• No pension contributions during the break
• Missed years of compound growth
• Often return part-time with lower salary
• May lose track of old pension pots

The maths: A 5-year break at age 30, assuming 7% growth, could cost you £100,000+ by retirement.

3. Part-Time Work Penalties

Many women work part-time after having children:

• May fall below auto-enrolment threshold (£10,000)
• Miss out on employer contributions
• Smaller pots from smaller contributions

4. Women Live Longer

This makes it worse, not better:

• Average UK woman lives 3 years longer than average man
• Smaller pot needs to stretch further
• Higher risk of running out of money

5. We're Less Likely to Engage

Studies show women:

• Are less confident about investing
• More likely to stay in default funds
• Less likely to consolidate old pensions
• More likely to be in cash within their pension

What You Can Do About It

Check Your State Pension Record

Visit gov.uk/check-state-pension and:

• See your current forecast
• Check for gaps in National Insurance
• Voluntary contributions can fill gaps (often excellent value)

Consolidate Old Pensions

Average person has 11 jobs—potentially 11 pension pots. Find them all:

• Use the Pension Tracing Service
• Consider consolidating into one pot
• Stop paying unnecessary fees on small, forgotten pensions

Maximise Employer Contributions

If your employer offers matching:

• Find out the maximum match available
• Contribute at least enough to get the full match
• This is literally free money

If You're Taking a Career Break

You can still contribute to a pension:

• Up to £3,600 gross even with no earnings
• Partner can contribute on your behalf
• Keep the growth engine running

If You're Returning Part-Time

• Check if you're above auto-enrolment threshold
• Ask to opt in even if you're below
• Consider salary sacrifice if available

Increase Your Investment Risk (Appropriately)

If you're decades from retirement:

• Cash-heavy pension funds will lag behind
• Consider your risk tolerance honestly
• Growth investments over long periods typically outperform

A Note for Partners

If you're in a relationship where one person earns significantly more:

• Consider contributing to your partner's pension
• Discuss retirement planning together
• Ensure both of you will have adequate income

This isn't about fairness in a divorce sense—it's about ensuring neither of you faces poverty in retirement.

The Systemic Issues

While individual action helps, let's be clear: this is also a systemic problem:

• Workplace structures that penalise caring responsibilities
• Pay gaps that compound over decades
• Financial services designed by and for men
• Auto-enrolment thresholds that exclude part-timers

We need to fight these too. But in the meantime, let's also protect ourselves.

Take control of your pension future. Our pension tools can show you exactly where you stand and what you can do.